JPMorgan's $100M penalty draws Cantwell praise
Source: Puget Sound Business Journal
JPMorgan Chase & Co. has agreed to pay a $100 million federal penalty and has admitted that its traders acted recklessly during a series of London trades that ultimately cost the bank $6 billion, The New York Times reported Wednesday.
The fine was part of a settlement between the New York-based banking giant (NYSE: JPM) and the Commodity Futures Trading Commission, the newspaper said.
In a news release, the federal agency said the bank "recklessly disregarded the fundamental precept on which market participants rely: that prices are established based on legitimate forces of supply and demand." Previously, the bank agreed to pay $920 million and admit fault in a deal with other regulators over the huge trading losses, which surfaced in April 2012.
The settlement drew praise from Sen. Maria Cantwell, D-Wash. In a prepared statement, Cantwell said this was CFTC's first use of expanded authority in the Dodd-Frank financial reform bill that allows the commission to more effectively prosecute manipulation of the commodity futures and derivatives markets.
"Today's settlement is exactly what Congress intended when we passed my amendment to Dodd-Frank to deter market manipulation," Cantwell said. The rule changed the burden of proof on market manipulation from "specific intent" to do harm, to a fraud-based "reckless conduct" standard used by other agencies, Cantwell said.
In Washington state, JPMorgan's Chase Bank operates more than 209 banking centers and employs 2,800 people. The company purchased Seattle-based Washington Mutual when it failed in 2008.
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