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JPMorgan agrees to $920 mln in fines to settle London Whale scandal

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JPMorgan Chase & Co. (NYSE:JPM) said it has agreed to pay about $920 million in fines to resolve multiple investigations relating to the huge trading blunder in the firm's London chief investment office that took place in August of last year. 

The settlements, with the Securities and Exchange Commission, the U.K. Financial Conduct Authority, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency, also come with an admission that the bank violated securities laws. 

It will pay $300 million to the Office of the Comptroller of the Currency, and $200 million each to the Securities and Exchange Commission and the Federal Reserve, as well as $220 million to the U.K. Financial Conduct Authority.

JPMorgan said the settlements for the London Whale scandal are a major step in the firm's "ongoing efforts to put these issues behind it", and is still cooperating with ongoing inquiries, including the prosecutions of the two former CIO employees. 

A formal indictment of two JPMorgan staffers, Javier Martin-Artajo and Julien Grout, was filed with the U.S. District Court in Manhattan earlier this week, following criminal charges laid against them by the S.E.C. and federal prosecutors last month. The pair were charged with wire fraud, falsifying bank records and contributing to false regulatory filings. 

Prosecutors chose not to charge a third trader, Bruno Iksil, who earned the moniker London Whale for the size of his trades, in exchange for his cooperation in the case against his former colleagues. 

"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," said chairman and CEO Jamie Dimon in the statement accompanying the announcement, released Thursday. 

"We will continue to strive towards being considered the best bank - across all measures - not only by our shareholders and customers, but also by our regulators. Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better company."

The final settlement figure is well beyond the $500 to $600 range penalty that the bank was previously estimated to pay. Though this case is now winding to an end, JPMorgan still faces inquiries from several other federal agencies and two European nations, one of which is tied to an ongoing probe into Bernard Madoff‘s Ponzi scheme, as well as to how the bank handled its customers during the recession.

Last month, the Department of Justice launched an investigation over JPMorgan's sale of mortgage-backed securities to Fannie May and Freddie Mac ahead of the financial crisis.

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NYSE:JPM
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