whale fail

London Whale Costs JPMorgan $920 Million in Addition to All of That Other Money

President and CEO of JPMorgan Chase Co. Jamie Dimon
Not a happy camper. Photo: Mark Wilson/Getty Images

Wow, tough week for Jamie Dimon. First, he’s humiliated by his 26-year-old daughter in a writing contest. Then some artist sketches him as a modern-day Kenneth Lay. Now his bank, JPMorgan Chase, is about to be out another $920 million for the events surrounding the London Whale’s 2012 trading losses, on top of the $6 billion or so the Whale already lost.

Dimon’s going to need another call from Tom Brady to make this all better.

The $920 million penalty is the result of a massive, multi-regulator settlement involving authorities in the U.S. and the U.K. Bloomberg reports:

The Office of the Comptroller of the Currency is imposing about $300 million in penalties, while the U.S. Securities and Exchange Commission, Federal Reserve and the U.K.’s Financial Conduct Authority each levy about $200 million in sanctions, one of the people said.

A few questions worth asking here are “Isn’t losing $6.3 billion its own punishment? Will an extra $920 million really deter the next Whale?” and “Is punishing all JPMorgan Chase shareholders by levying fines on the bank really a good way to punish a few dumb traders in the bank’s chief investment office?”

The answers to those questions are probably, respectively, “Yes,” “No,” and “No,” but it’s not as if JPMorgan Chase shareholders particularly care about these fines and losses, judging from their responses to previous fines and losses (the bank’s stock is up 28 percent since the Whale revelation!), and I suppose regulators had to do something with the revelation that the bank’s CIO traders were illegally mismarking trading positions and tinkering with risk models so as to make the losses appear less bad.

The newest $920 million fine won’t bring about a sudden change of heart at JPMorgan Chase, but it will give regulators something to brag about at their annual convention. And it’ll put a nice little period on the rambling, Faulknerian sentence that was the London Whale episode. Now we never have to read puns about “London Whale harpooned” or “beached Whale” again, and Bruno Iksil, the London Whale himself (who, as a crazy reminder, has miraculously escaped all of this!), gets to let out a sigh of relief from whatever Mediterranean beach he’s currently inhabiting.

London Whale Costs JPMorgan $920 Million