JPMorgan said to be near SEC settlement on London whale losses

Federal Probes

The Federal Bureau of Investigation and the SEC have been scrutinizing public statements, calls with investors and an April 2012 earnings presentation by Dimon and then-Chief Financial Officer Douglas Braunstein, Bloomberg News reported in June, citing five people with knowledge of the probes.

The criminal investigation has looked at, among other issues, whether traders painted the tape, a form of market manipulation that allows them to inflate the value of their positions, three of the people said at the time.

JPMorgan’s board cut Dimon’s pay in half for 2012 after concluding that he bore some responsibility for the debacle. It also credited his leadership for the lender’s performance. JPMorgan, the largest bank in the U.S. with $2.44 trillion in assets, reported a third straight year of record profits in 2012 with $21.3 billion in net income.

The stock rose 48 percent in the past 12 months, making it the fifth-best performer in the 24-company KBW Bank Index.

Fed Order

The Federal Reserve and Office of the Comptroller of the Currency took the first regulatory actions against the bank for the credit-derivatives trade in January, ordering it to strengthen risk controls and enhance executive-pay practices. The board also was directed to consider control weaknesses and “adverse risk outcomes” in compensation awards for Dimon, 57, and other top managers.

The trading debacle also prompted calls for Dimon to cede his chairmanship and for JPMorgan to oust board members. In May, shareholders voted to let him keep the chairman title. Two members of the board’s risk committee, Ellen V. Futter and David M. Cote, left the board last month.

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