JP MORGAN Chase was last night ordered by regulators to tighten up risk controls after a trader known as the London Whale lost the firm $6.2bn (£3.9bn).
The investment giant was hit with two consent orders from the Federal Reserve and the Office of the Comptroller of the Currency, one for the trading losses, and another requiring it to comply more closely with measures aimed at tackling customer money laundering.
A spokesperson for JP Morgan promised the bank was taking steps to deal with both issues. “Complying with anti money laundering responsibilities is a top priority for us,” a spokesperson said. And of the controls surrounding the London Whale losses: “We’ve been working hard to fully remedy the issues identified in the consent order.”
As well as US authorities, the UK’s Financial Services Authority issued a statement saying it was also making a formal investigation into the trading losses that not only hit the banking giant’s reputation and balance sheet, but also lost it the right to buy its own stock for six months.