In a letter to SEC Mary Jo White, Senator John McCain (R-AZ) urged the government to hold individuals accountable for their role in JPMorgan Chase’s $6 billion loss associated with the “London Whale” trading debacle in 2012. While the senator acknowledged that the $920 million settlement constitutes a significant rebuke to the financial institution, he believe that the government must hold accountable those individuals who compromised the integrity of the financial markets. Senator McCain, Ranking Member on the Investigations Subcommittee, said that the government’s incomplete enforcement actions to date fail to achieve that goal.
Senator McCain asked Chairman White to promptly respond to a number of questions, including whether the SEC considered requiring admissions of wrongdoing on the part of any individuals within the bank as part of the settlement negotiations. He also wants to know what factors led to the decision to not address individual misconduct in the settlement. The Senator also asks if the global settlement agreement precludes either civil or criminal enforcement action against individuals at JPMorgan. The SEC Chair is also queried whether anyone within the SEC referred any individuals to the DOJ for criminal prosecution and, if so, to explain the situation. Finally, the Senator asked the SEC Chair to describe how each of the following were considered, determined, and structured in the settlement: penalties, fines, disgorgement, compensatory damages and/or restitution, and admissions of wrongdoing.
In a separate statement, Senator Carl Levin (D-MI), Chair of the Subcommitee, said that the whole issue of misinforming investors is missing from the SEC findings and settlement. He noted that the Subcommittee’s investigation showed that senior bank executives made a series of inaccurate statements that misinformed investors and the public as the London Whale disaster unfolded. Other civil and criminal proceedings are unfolding, he said, so there is still time to determine any accountability on that matter.