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4 JP Morgan Scandals Hurting World's Biggest Bank

Raishad Hardnett |
September 19, 2013 | 12:40 p.m. PDT

Executive Producer

JP Morgan agreed to paying $920 million in fees for covering up losses and mismanaging its traders. (Photo via Creative Commons)
JP Morgan agreed to paying $920 million in fees for covering up losses and mismanaging its traders. (Photo via Creative Commons)
As far as disastrous scandals go, it's been a dramatic couple of years for the world's largest bank -- and it seems the scandals aren't letting up. JP Morgan has reported over $21 billion in legal fees since 2008, according to Bloomberg.

And now we can add almost $1 billion to that number: JP Morgan Chase agreed to pay $920 million in fines after it admitted to wrongdoing for placing bad bets on a high-risk trade last year. 

The trade resulted in losses of $6.2 billion, sending shockwaves through financial markets. JP Morgan was later cited for covering up those losses, as well as weak management and failing to comply with regulators. 

"JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses," George S. Canellos, co-director of the SEC’s enforcement division, said in a statement according to the Washington Post. "While grappling with how to fix its internal control breakdowns, JPMorgan's senior management  ... deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors."

Here are three other JP Morgan scandals from 2013 that have hurt the world's biggest bank:

Scandal #2: Energy

In July, JP Morgan agreed to pay $410 million to settle  Federal Energy Regulatory Commission's investigation into whether the institution manipulated energy markets in the Midwest and in California. Although the bank did not admit or deny wrongdoing, it agreed to pay  $124 million to California residents and $1 million to Midwest residents who overpaid for electricity. (Read more here.)

Scandal #3: Madoff

Bernie Madoff pleaded guilty in 2009 to operating a 50-billion-dollar Ponzi scheme for decades. According to the New York Times, prosecutors are investigating JP Morgan -- which operated as Madoff's primary bank for years -- for failing to inform authorities of its suspicions about Madoff's illegal activities.  (Read more here.)

Scandal #4: LIBOR

In March, the mortgage company Freddie Mac sued JP Morgan and a number of other banks for allegedly manipulating the London interbank interest rate (LIBOR). (Read more here.)

To reach Executive Producer Raishad Hardnett, email him at [email protected] or follow him on Twitter



 

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