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JPMorgan ordered to improve controls after 'London Whale' loss, anti-laundering lapses

Jan 15 2013 Reuters and Brett Wolf of Compliance Complete

U.S. banking regulators have ordered JPMorgan Chase & Co to tighten its risk controls after the bank lost billions of dollars due to bad bets from a trader known as the "London Whale." The Federal Reserve and the Office of the Comptroller of the Currency issued the consent orders which levy no monetary penalties and place no specific blame on any individuals. Instead, JPMorgan and its board agreed to submit an improvement plan to the Fed within 60 days, including taking risk outcomes into account when considering top executives' pay packages. In a separate action, the banking regulators also ordered JPMorgan to improve its compliance with the Bank Secrecy Act and anti-money laundering requirements. The OCC began asking JPMorgan last April about its derivatives trades after press reports described contracts arranged by a London-based bank trader, nicknamed the London Whale by hedge funds for the size of the positions he took. The company, which reports its fourth-quarter earnings

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