S.E.C. Opens Investigation Into JPMorgan’s $2 Billion Loss
Regulators are investigating potential civil violations surrounding the $2 billion loss that JPMorgan Chase disclosed on Thursday, raising further questions about the trading activities at the nation’s biggest bank.
The Securities and Exchange Commission recently opened a preliminary investigation into JPMorgan’s accounting practices and public disclosures about the trades, according to people briefed on the matter, who spoke on the condition of anonymity because the case is not public. Regulators learned about the activities in April, and formally opened an investigation in recent days, the people said.
The case, which is being run out of New York, will likely examine the bank’s past regulatory filings about the internal unit that placed the trades — as well as recent statements from the firm’s top executives.
In April, questions surfaced about the group, the so-called chief investment office, after reports emerged that a London-based trader was taking large bets that distorted the market. At the time, Jamie Dimon, the bank’s chief executive, dismissed the concerns about the trading activities, calling them a “complete tempest in a teapot.”
On Thursday, JPMorgan revealed that the group had suffered significant losses, which could cost the firm $2 billion or more. A more humble Mr. Dimon on Thursday said “egregious mistakes” were made.
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