Regulators Order JPMorgan Chase to Improve Controls

Regulators Order JPMorgan Chase to Improve Controls

January 15, 2013         Written By Lynn Oldshue

JPMorgan Chase received two enforcement actions from federal regulators on Monday.

One was for failures in risk management that led to a multi-billion dollar trading loss. The loss on a derivatives trade was first discovered in May and could be as high as $6 billion.

Regulators found problems in assessing potential losses due to complex trades and also lack of communication to tell the board about the increasingly risky wagers. The Office of the Comptroller of the Currency’s office faulted the bank for “an inadequate system of internal controls and independent testing.” Chase must present a plan for tightening its risk management.

In addition, the regulators cited Chase for breakdowns in money-laundering controls. The bank must improve the way it monitors cash transactions in order to diminish the chances of tainted money moving through the bank’s system.

The actions by regulators did not include any monetary fines. Chase did not admit or deny any wrongdoing.

The information contained within this article was accurate as of January 15, 2013. For up-to-date
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About Lynn Oldshue

Lynn Oldshue has written personal finance stories for for twelve years. She majored in public relations at Mississippi State University.
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