JPMorgan Chase is considering admitting wrongdoing in a civil settlement with UK and US authorities over the ‘London Whale’ trading losses, according to reports.
Sources told the Financial Times that the investment bank is in discussions with regulators such as the US Securities and Exchange Commission about admitting culpability in the case.
Bloomberg reports that the bank is prepared to say how it failed in overseeing the unit responsible for the losses but it is not likely to admit to any mistakes that have not yet been disclosed.
JPMorgan’s shareholders suffered $6.2bn (£3.9bn) losses last year following botched trades on large credit derivatives by London-based traders, thought to have been racked up by Bruno Iksil – who was given the ‘London Whale’ nickname by his peers.
In January, the bank published a 129-page report that blamed some of its managers and an “error-prone” risk-modeling system for the losses. Many of the managers concerned were reassigned or left the bank last year.
Chief executive Jamie Dimon has made public admissions of the mistakes, saying in June: “I don’t know what more I can say. Bad strategy, badly vetted, badly monitored, badly controlled. Embarrassing. Terrible. Sorry.”
Should JPMorgan admit blame for the case, it would be a departure from banks’ usual practice of neither accepting or denying culpability for such incidents.
It would also mark the first victory for the programme initiated by SEC chair Mary Jo White, which seeks to push for admission of wrongdoing in cases of “egregious misconduct”.
The UK’s Financial Conduct Authority and the US Federal Bureau of Investigation are also carrying out probes into the losses.