Under the terms of the agreement, the bank will reimburse $300m to the US Office of the Comptroller of the Currency (OCC), while the Securities and Exchange Commission (SEC) and the US Federal Reserve, each will receive $200m.
Additionally, the bank will have to cough up a further £138m ($220m) to the UK Financial Conduct Authority (FCA) as part of the global settlement.
The FCA said that the trading losses incurred due to high-risk trading strategy, weak management of trading and an inadequate response to important information present in the CIO’s Synthetic Credit Portfolio (SCP).
The US Securities and Exchange Commission (SEC) accused JP Morgan Chase for misstating financial results and lacking effective internal controls to discover and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.
The bank has accepted the wrongdoing, admitted the charges leveled by the SEC, and publicly acknowledging that it violated the federal securities laws, said the US securities regulator.
Commenting on the global settlement, JP Morgan chairman and CEO Jamie Dimon said that the bank has accepted responsibility and acknowledged the mistakes from the start, and has learned from them and worked to fix them.
"We will continue to strive towards being considered the best bank – across all measures – not only by our shareholders and customers, but also by our regulators," Dimon added.
SEC enforcement division co-director George Canellos commented, "JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses."
Most recently, US regulators filed criminal charges against two former JP Morgan traders who were accused of concealing losses on failed trades.
In another legal debacle, the US Consumer Financial Protection Bureau (CFPB) imposed a monetary penalty of $309m against JP Morgan, for its illegal credit card practices, during October 2005 and January 2012.
