The bank also admitted that it acted recklessly as part of its settlement with the US Commodity Futures Trading Commission (CFTC). It has already paid out more than $900m to other regulators in fines.
The London Whale incident involves a series of bad derivatives bets made by the bank’s European division under the guidance of French trader Bruno Iksil. The decisions left the bank nursing extraordinary trading losses of $6.2bn on deals involving credit default swaps.
Yesterday’s fine relates to the bank’s attempts to unwind the problematic position in a single day on 29 February 2012.
“By selling a staggering volume of these swaps in a concentrated period, the bank, acting through its traders, recklessly disregarded the fundamental precept on which market participants rely, that prices are established based on legitimate forces of supply and demand,” the CFTC explained.