JPMorgan Chase received a cease-and-desist order from the Fed to take corrective action in its chief investment office following the “London Whale” trade.
The bank also received an order to enhance its anti-money laundering compliance.
Regulators use cease-and-desist orders to make banks to improve areas of compliance weakness, according to Reuters.
Here’s the release:
The Federal Reserve Board on Monday issued two consent Cease and Desist Orders against JPMorgan Chase & Co., New York, New York (JPMC), a registered bank holding company. The first order requires JPMC to take corrective action to continue ongoing enhancements to its risk-management program and its finance and internal audit functions, particularly in regard to JPMC’s Chief Investment Office (CIO). The Board’s order follows the disclosure of significant losses in a large synthetic credit portfolio that was managed by the CIO. The second order requires JPMC to take corrective action to enhance its program for compliance with the Bank Secrecy Act and other anti-money laundering requirements at JPMC’s various subsidiaries.
The bank has 60 days to submit its written plan, the order states [.PDF].