Fed Issues JP Morgan Cease & Desist Over CIO Risk Management, Money Laundering

Ben Bernanke Jamie DimonThe Federal Reserve Monday issued it’s owners (JP Morgan Chase) a two separate Cease and Desist orders.  The first orders JPM to take corrective action regarding its prop-trade hedge fund known as the Chief Investment Office (CIO), and the second orders The Morgue to take corrective action regarding compliance with anti-money laundering requirements
The Office of the Comptroller reportedly also issued two similar orders against JPM Monday.

We’re sure Jamie’s conversation with Ben went something like this,  ‘You want us to do WHAT with our hedge fund?  Oh, yeah, sure Benny, we’ll get right on that.

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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 Office of the Comptroller of the Currency on Monday issued two similar Consent Orders against JPMorgan Chase Bank, N.A., Columbus, Ohio.

 

http://www.federalreserve.gov/newsevents/press/enforcement/20130114a.htm

 

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