After going through the multi billion dollar Whale Losses JP Morgan Chase & Co (NYSE: JPM) now faces severe regulatory action which may go beyond merely financial reprimand. The Office of the Comptroller of the Currency (OCC) is set to pass a cease and desist order that requiring the bank to amend its risk management practices including the internal controls framework.<\/p>\n
A few people briefed on the situation , who requested anonymity revealed that the regulatory action will eradicate chances of future occurrences of the highly risky wagers such as those of its one trader, Bruno Iksil. The matter is still under discussion and neither the regulator nor the company has gone public with the decisions.<\/p>\n
During the last week a report of The Wall Street Journal also revealed there is not much chance that the bank will be reprimanded through financial penalties. However Joe Evangelisti spokesperson for the bank and Bryan Hubbard, spokesperson for the OCC both withheld commenting on the news.<\/p>\n
According to internal sources the enforcement of the order is yet to be scheduled formally.<\/p>\n
The action seems to be a repercussion of the May 2012 statement of the bank\u2019s Chief Executive Officer, Jamie Dimon, issued immediately after the losses were reported. \u00a0Stating that the highly risky wagers of the London based trader employed at the chief investment office of the bank had cost it $6.2 million losses, he also pointed out that the strategy of the bank is filled with \u201cerrors, sloppiness and bad judgment.\u201d Dimon also reported<\/p>\n
However during a U.S. Senate Testimony, Thomas Curry Comptroller did mention that the bank\u2019s Chief investment office had \u201cinadequate risk management\u201d and his agency would be focusing \u00a0on identifying the \u2018\u2018deviations from accepted standards of risk management\u201d that exist in that office or elsewhere within the organization.<\/p>\n
The Investigation Subcommittee of the U.S. Senate will also be probing into the losses. Carl Levin a Michigan state Democrat who is also chairman at the Senate investigation committee termed it a classical case which exhibits the need for regulatory intervention in the activities of the bank\u2019s relating to proprietary trades, through measures like the Volcker\u2019s rule which regularize the investment banks from trading funds.<\/p>\n
The banking industry risk report released by the OCC yesterday, also reported that the well publicized events of the bank contributed to the overall performance decline in the \u2018\u2018second quarter trading\u2019\u2019 for the banking industry.<\/p>\n
The shares of\u00a0JPMorgan Chase & Co (NYSE:JPM) were down 1.19% to close at $44.<\/p>\n","protected":false},"excerpt":{"rendered":"
After going through the multi billion dollar Whale Losses JP Morgan Chase & Co (NYSE: JPM) now faces severe regulatory action which may go beyond […]<\/p>\n","protected":false},"author":10,"featured_media":5145,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"twitter_2902945987_2902945987":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[1483],"tags":[603],"stock_ticker":[],"class_list":["post-5144","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hot-news","tag-nysejpm","entry"],"acf":[],"yoast_head":"\n