JP Morgan Fined Over $1 Billion for Wall Street Scams

Published on Blog, by Richard Smallteacher, September 20, 2013.

JP Morgan, the Wall Street investment bank, has been fined $920 million for violating trading laws that were discovered after trader Bruno Iksil (nicknamed the “London Whale”) lost billions in bets last May. It was also fined over $80 million for credit card scams in an unrelated incident. 

In the first incident, JP Morgan agreed Thursday to pay $300 million in fines to the U.S. Comptroller of the Currency, $200 million to the U.S. Federal Reserve, $200 million to the U.S. Securities and Exchange Commission and £137.6 million ($219.74 million) to the U.K. Financial Conduct Authority (FCA).

Iksil, a London based trader for JP Morgan, lost much of his money to Boaz Weinstein from Saba Capital Management in New York. The two men are known as “whales” in the financial markets because of the size of their bets, which often run into billions of dollars. Winning and losing huge sums of money at this game, is considered part of the Wall Street culture. Indeed Weinstein previously lost $2 billion in such bets when he worked at Deutsche Bank. But there are reporting rules that these traders are supposed to follow to make sure that they do not cheat the public … //

… Still, shareholders aren’t going to be too upset about the fines, since they add up to just
five percent of net profits of $21.3 billion that JP Morgan made in 2012.

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(see also: Welcome to our new blog: politics for the 99%).

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