A Regulator Cuts Its New Teeth on JPMorgan in 'London Whale' Case - NYTimes.com:
Updated, 8:49 p.m. | Lobbying groups for Wall Street’s biggest banks cautioned that a new rule before the nation’s commodities trading regulator “could have myriad unintended adverse consequences.” A hedge fund trade group feared that the rule was “overly aggressive.” And the CME Group, one of the world’s largest futures exchanges, warned that the rule was susceptible to legal action.
Now, roughly two years after the Commodity Futures Trading Commission adopted the rule, lowering the legal requirement for proving that financial firms manipulate the markets, Wall Street is feeling the effects of the rule it fought so hard to tame.
The agency announced on Wednesday thatJPMorgan Chase, the nation’s biggest bank, agreed to pay $100 million and admit wrongdoing to settle an investigation into market manipulation involving the bank’s multibillion-dollar trading loss in London.
JPMorgan’s trading activity was so voluminous that the bank was recklessly “employing a manipulative device” in the market for swaps, which are financial contracts that allowed the bank to bet on the health of companies like American Airlines. The bank sold “a staggering volume of these swaps in a concentrated period,” the trading commission said.
'via Blog this'Now, roughly two years after the Commodity Futures Trading Commission adopted the rule, lowering the legal requirement for proving that financial firms manipulate the markets, Wall Street is feeling the effects of the rule it fought so hard to tame.
The agency announced on Wednesday thatJPMorgan Chase, the nation’s biggest bank, agreed to pay $100 million and admit wrongdoing to settle an investigation into market manipulation involving the bank’s multibillion-dollar trading loss in London.
JPMorgan’s trading activity was so voluminous that the bank was recklessly “employing a manipulative device” in the market for swaps, which are financial contracts that allowed the bank to bet on the health of companies like American Airlines. The bank sold “a staggering volume of these swaps in a concentrated period,” the trading commission said.
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