Today, U.S. and U.K. regulators combined to impose $920 million in fines against JPMorgan Chase (JPM), building on prior actions in the U.S. that were widely criticized for failing sufficiently to sanction the bank in the wake of the London Whale debacle. Although these actions are strong, public sanctions that forced JPM to admit culpability – unusual in most recent high-profile actions – more enforcement cases remain under way. JPM has signalled that the CFTC is contemplating action and reports signal similar work under way at the New York AG and Justice Department (stung deeply by AG Holder’s prior statement that some banks are too big to fail). If these law-enforcement cases result in criminal charges against the bank or senior management, JPM’s legal and reputational risk will spike from its already high level. This report analyzes each enforcement action and assesses their impact on other banking organizations. Indeed, the case has still broader impact, given that the SEC’s action is based on its view of the responsibilities of public companies, sanctioning the BHC on grounds that it failed its legal duties properly to inform investors. The SEC has also signalled that it continues to pursue “individuals,” not making clear how high this chase will go. The U.K. action appears based at least as much on the systemic risk potential of market surprises at so large a bank as on prudential worries, suggesting a new tack the U.K. will take in assessing the very largest firms. However, the OCC’s case is notable for its unsparing description of how unsafe and unsound it found conditions at JPM’s national bank.  

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