JPMorgan Chase & Co agreed to pay $100-million and admit its traders acted recklessly to settle one more set of U.S. charges over its disastrous “London Whale” trade, the Commodity Futures Trading Commission announced on Wednesday.
Last month the bank paid $920-million to four other U.S. and British regulators to resolve civil probes of the bank’s $6.2-billion in derivative losses involving its chief investment office.
The new CFTC case charges the bank with violating a prohibition on manipulative conduct when it traded in the credit default swaps at issue.
By selling a huge volume of swaps in a concentrated period, the bank’s traders “recklessly disregarded” the precept that legitimate market forces should set prices, the CFTC said.
One Republican commissioner, Scott O’Malia, voted against the settlement and said he thought the CFTC should have further investigated whether JPMorgan engaged in a more serious violation of price manipulation.
“I am concerned that in a rush to join in on a settlement brokered by other regulators, the commission may be missing the opportunity to pursue allegations of greater wrongdoing,” O’Malia said in a statement.
By charging the bank with “employing a manipulative device,” the agency relied on new powers granted in by the 2010 Dodd Frank financial regulatory overhaul.
The agency has been operating on a skeleton staff since the October 1 government shutdown, and called some employees in on Wednesday on an “emergency basis” to announce the settlement, Commissioner Bart Chilton said on CNBC.
“We are pleased to be able to put behind us another aspect of the CIO trading matter by the resolution of the CFTC investigation,” JPMorgan spokesman Joseph Evangelisti said.