JP Morgan hit with $973m in fines for 'London whale' trades

JP Morgan has been fined $US920 million ($973.6 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 from Britain's Financial Conduct Authority - the second largest imposed on a bank by British regulators - for "serious failings" in its chief investment office that led to the unit losing $US6.2 billion as a series of high-risk trades went wrong last year.

In addition, the US Federal Reserve, 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.

An international investigation into the CIO team has already led to two former JP Morgan 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 unit's losses. The men have denied any wrongdoing and are fighting US extradition attempts. The London Whale, former JP Morgan trader Bruno Iksil, has been granted immunity from prosecution and is co-operating with the investigation.

Chief investment officer Ina Drew stepped down following the revelation of the losses last year.

Tracey McDermott, director of enforcement and financial crime at the FCA, said the penalty reflected the "extremely serious" failings uncovered at the bank.

"There were basic failings in the operation of fundamental controls over a high-risk part of the business," Ms McDermott said. "Senior management failed to respond properly to warning signals that there were problems in the CIO."

Chief executive of JP Morgan Jamie Dimon (pictured) 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 "tempest in a teacup" before an internal investigation uncovered the full extent of the mismarking of the CIO unit's losses, forcing the bank to restate its financial results.

The damning 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.

A professor at London's Cass Business School, Andre Spicer, said the reorganisation was "unlikely to be enough" and that more needed to be done to prevent further "costly mistakes".

Shares in JP Morgan remained largely unaffected by the fines and rose slightly after the penalties were confirmed.