Banking Debt Articles

JPMorgan Chase Gets Slapped for Derivatives Trading Activity

Written by Steve Rhode

The Office of the Comptroller of the Currency (OCC) announced today the issuance of a cease and desist order, by consent, against JPMorgan Chase, N.A., for unsafe and unsound practices and violations of law or regulation related to derivatives trading activities conducted on behalf of the bank by the Chief Investment Office (CIO).

The OCC found that the bank’s internal controls failed to identify and prevent certain credit derivatives trading conducted by the CIO that resulted in substantial loss to the bank, which has exceeded $6 billion. The OCC has conducted several targeted exams which found the following deficiencies related to the credit derivatives trading practices conducted by the CIO: inadequate oversight and governance to protect the bank from material risk, inadequate risk management processes and procedures, inadequate control over trade valuation, inadequate development and implementation of models used by the bank, and inadequate internal audit processes.

Concurrent with the OCC’s enforcement action, the Board of Governors of the Federal Reserve System has issued a cease and desist order upon consent with the bank’s parent company, JPMorgan Chase & Co.

You can read the cease and desist order here.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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