IRAC Brief: JP Morgan Chase Settles the London Whale
This is a case study analysis of a current legal case regarding the governance principles of regulatory compliance and the methods used to manage risk arising. The briefing of this case will utilize the IRAC method of case analysis to give a breakdown on the case of JP Morgan Chase on regulatory violations and risk management. The IRAC method will address I - Issue, R - Rule, A - Analysis, and C - Conclusion which will provide a researched assessment of the trading loss violations on this case. Please read and review this analysis of the case utilizing IRAC method of case analysis.
JP Morgan Chase permitted traders in its London ...view middle of the document...
1). The unsafe business practices and lack of executive oversight led to a $6 billion loss. To make matters worse, “JPMorgan has previously said it has recordings, e-mails and other documents that suggest its traders may have been hiding the losses as they ballooned” (Isidore & O’Toole, 2013, para. 16). The rule states that JP Morgan must monitor effectively and manage trading losses through effective internal controls and executive oversight. In the event that losses do occur, JP Morgan is responsible for reporting these findings to its shareholders.
Regulations regarding trade losses have been put into place in accordance to the Securities and Exchange Commission and the Commodity Futures Trading Commission. The laws enforced investigate and execute its law enforcement function of securities law violations and wrongful trade exchanges. In the JPMorgan Chase settlement the bank admitted fault in misconduct as it prides itself on ability to manage risk. JPMorgan Chase is impacted in the sense of the regulatory agencies monitoring every practice and mortgage loan being made. Furthermore, the banks reputation is jeopardized, along with fines, which were to be paid among various commissions and compliance regulatory agents.
The Bank admitted their wrongful doing in misleading investors about risk and trade, which presented possible private litigations uprising. With this noted the governance principles of regulatory compliance require that full compliance of national laws be in adhered to and that the soundness of principles as well as other standards for financial institutions. The undergoing of annual external audits within the end of a fiscal year and the audit relationship should be reexamined frequently in further consideration of changing the auditors every three to five years ("SEC.gov | How Investigations Work", 2013, p.1). However, JPMorgan Chase as a result will...