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"The best policeman is a rule that basically everyone understands and lives by," she said. In addition to paying the $100 million, JPMorgan agreed in the settlement to continue to take steps to tighten its oversight of derivatives trading with an eye to reducing risk. The Justice Department has been investigating JPMorgan for possible criminal violations in connection with the London trades. One of the traders involved, Bruno Iksil, was known as the "London Whale" for the outsize bets he made that could roil markets. JPMorgan was one of the few financial institutions to come through the 2008 financial crisis without suffering major losses. The trading loss raised concern about continued risk-taking by Wall Street banks five years after the financial crisis plunged the country into the worst recession since the Great Depression of the 1930s. The fallout ensnared JPMorgan CEO Jamie Dimon, who initially dismissed news reports of the huge bets by the London operation as a "tempest in a teapot." He later acknowledged the magnitude of the losses, admitted to Congress that the bank failed in its oversight and took a multi-million-dollar pay cut. Federal prosecutors in New York filed criminal charges in August against JPMorgan traders Javier Martin-Artajo and Julien Grout. Martin-Artajo supervised the bank's trading strategy in London, and Grout, his subordinate, was in charge of recording the value of the investments each day. They were charged with conspiracy to falsify books and records, commit wire fraud and falsify filings to the SEC. Both traders, through their lawyers, have denied any wrongdoing. No charges have been brought against Iksil. Prosecutors say he tried to raise questions about how his colleagues were recording the trades. The settlement with the CFTC comes at a time when JPMorgan is in talks with the Justice Department to resolve unrelated claims dating back to the 2008 financial crisis. The payout could be as much as $11 billion to resolve claims over its sales of mortgage-backed securities in the run-up to the crisis.
[Associated
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