JPMorgan has been fined $US920 million ($973 million) by British and US regulators over the "London Whale" trades that lost the bank more than $US6 billion.
The US bank was hit with a $US220 million fine by Britain's Financial Conduct Authority - the second largest fine ever imposed on a bank by British regulators - for "serious failings" in its chief investment office that led to it losing $US6.2 billion as a series of high-risk trades went wrong last year.
In addition, the US Federal Reserve, the Securities and Exchange Commission, and the Office of the Comptroller of the Currency imposed further penalties of $US200 million, $US200 million and $US300 million respectively, taking the total to $US920 million.
The fines follow an international investigation into the investment team that has already led to two former JPMorgan executives being indicted by US prosecutors.
Javier Martin-Artajo and Julien Grout have been accused of inflating the value of trading positions to hide the scale of the losses. The men have denied any wrongdoing and are fighting US extradition attempts.
The London Whale, former JPMorgan trader Bruno Iksil, has been granted immunity from prosecution and is co-operating with the investigation. The bank's chief investment officer, Ina Drew, stepped down following the revelation of the losses in 2012.
JPMorgan's fine in Britain is eclipsed only by the £160 million paid out by UBS in December for its role in Libor-rigging.
Tracey McDermott, director of enforcement and financial crime at the FCA, said the penalty reflected the "extremely serious" failings at the bank. "There were basic failings in the operation of fundamental controls over a high-risk part of the business. Senior management failed to respond properly to warning signals that there were problems," said Ms McDermott.
JPMorgan chief executive Jamie Dimon said: "We have accepted responsibility and acknowledged our mistakes from the start, and we have learnt from them and worked to fix them. Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better company."
Mr Dimon last year referred to the losses as a "tempest in a teacup" before an internal investigation uncovered the full extent of the mismarking of the losses, forcing the bank to restate its financial results.
The findings have already led Mr Dimon to unveil a root-and-branch overhaul of the bank's operations. In a memo to staff this week, Mr Dimon said he would be "simplifying" the business to prevent a recurrence of the scandal.
Andre Spicer, a professor at Cass Business School, said that was "unlikely to be enough" and more would need to be done to prevent further "costly mistakes".
JPMorgan shares rose slightly after the penalties were confirmed.