CFTC Filed Settled Charges against JP Morgan in Connection with the “London Whale” Swaps Trades

In the Matter of JPMorgan Chase Bank, N.A., CFTC Docket No. 14-01.  On October 16, 2013, the CFTC announced it issued a settled Order against JPMorgan Chase Bank, N.A. (“JPMorgan”) in connection with the trading of certain credit default swaps (“CDS”).  According to the Order, by selling a large volume of these swaps, JPMorgan recklessly disregarded concept that prices are established based on legitimate forces of supply and demand.  As a result, the CFTC has found the Bank liable for violating Section 6(c)(1) of the Commodity Exchange Act (the “Act”), 7 U.S.C. §9 (2012), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), and Commission Regulation 180.1, 17 C.F.R. §180.1 (2012).  As part of the settlement, JPMorgan admitted the Order’s factual findings that its traders acted recklessly and has agreed to pay a $100 million civil monetary penalty.

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