The DOJ Is Conducting A Criminal Investigation Into JP Morgan's Forex Trading

Jamie dimonReutersJP Morgan CEO Jamie Dimon

The Department of Justice is conducting a criminal probe on JP Morgan’s foreign exchange trading.

The bank gave notice of this investigation in a government filing released today.

Here’s what it says:

DOJ is conducting a
criminal investigation, and various regulatory and civil enforcement

authorities, including U.S. banking regulators, the Commodity Futures

Trading Commission (“CFTC”), the U.K. Financial Conduct Authority

(the “FCA”) and other foreign government authorities, are conducting civil investigations, regarding the Firm’s foreign exchange (“FX”) trading business. These investigations are focused on the Firm’s spot FX trading activities as well as controls applicable to those activities. The Firm continues to cooperate with these investigations and is currently engaged in discussions with DOJ, and various regulatory and civil enforcement authorities, about resolving their respective investigations with respect to the Firm. There is no assurance that such discussions will result in settlements.

Since November 2013, a number of class actions have been filed in the United States District Court for the Southern District of New York against a number of foreign exchange dealers, including the Firm, for

alleged violations of federal and state antitrust laws and unjust enrichment based on an alleged conspiracy to manipulate foreign exchange rates reported on the WM/Reuters service. In March 2014,

plaintiffs filed a consolidated amended class action.

Elsewhere in the filing the bank disclosed that over the last few months there’s been a heightened willingness among regulators to bring criminal charges against banks in general. It said that these investigations have “significant collateral consequences” to banks, including losing customers or getting banned from being able to sell certain products.

They’re not great for stock prices either.

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