JPMorgan Chase will pay $920 million in fines for failing to oversee risky trading strategies that led to a huge loss last year. The London Whale settlement, one of the costliest ever for a bank, isn’t the only legal issue JPMorgan must deal with. Here’s a rundown:
— More trading loss fallout: The Department of Justice is still pursuing a criminal investigation of the $6 billion trading loss and a possible coverup at the bank. Two of the bank’s former traders in London, where the loss occurred, are facing criminal charges. The Securities and Exchange Commission is also investigating individuals involved in the trading loss.
— Mortgages: The government is still investigating JPMorgan over mortgage-backed securities, which JPMorgan and other banks sold in the run-up to the financial crisis. The securities lost value after a bubble in the housing market burst. The bank also faces lawsuits from the National Credit Union Administration and the New York attorney general’s office.
—MF Global: JPMorgan held funds for the brokerage MF Global, which collapsed in 2011, and also processed some of its trades. At the time, about $1.2 billion in customer money was missing from MF Global’s accounts. It was later discovered that the funds were used to pay for MF Global’s own operations.
After months of legal wrangling, a court approved a plan in July under which the bank agreed to return cash to former customers. The bank continues to respond to inquiries from the Commodity Futures Trading Commission. It is also being sued by people who invested in MF Global and claim that JPMorgan, as an underwriter, wasn’t upfront about the risks MF Global was taking.
— Bernie Madoff: Remember him? JPMorgan was one of the banks the disgraced fraudster used when he was running his giant Ponzi scheme. JPMorgan says it is responding to investigations by the Justice Department and other regulators. The bank didn’t give details, but it has previously faced accusations that it and other banks ignored signs that Madoff was a con artist.