J.P. Morgan has been fined a total of $920m (£571m) over the infamous 'London Whale' trades which led to derivatives losses last year of $6bn (£3.7bn).
The Financial Conduct Authority (FCA) has fined the investment bank £137.6m for failing to effectively supervise traders in the 'London Whale' affair, and for failing to accurately report its trading positions.
The FCA's decision has been coordinated with regulators in the US as part of an overall settlement of $920m.
The FCA said the bank's serious failings related to its chief investment office but its conduct demonstrated flaws on all levels of the firm: from portfolio level right up to senior management.
This resulted in breaches of Principles 2, 3, 5 and 11 of the FCA's Principles for Businesses - the fundamental obligations firms have under the regulatory system.
The FCA said it would implement tougher compliance, reporting and risk management procedures with the bank's executives in the UK and will monitor the firm's activities more robustly, according to the Wall Street Journal.
FCA director of enforcement and financial crime Tracey McDermott said: "When the scale of the problems at J.P. Morgan became apparent, it sent a shockwave through the markets.
"Maintaining the integrity of markets is a key part of our wholesale conduct agenda. We consider J.P. Morgan's failings to be extremely serious such as to undermine the trust and confidence in UK financial markets."
She added: "This is yet another example of a firm failing to get a proper grip on the risks its business poses to the market. There were basic failings in the operation of fundamental controls over a high risk part of the business. Senior management failed to respond properly to warning signals that there were problems in the CIO.
"As things began to go wrong, the firm didn't wake up quickly enough to the size and the scale of the problems. What is worse, they compounded this by failing to be open and co-operative with us as their regulator.
"Firms must learn the lessons from this incident and ensure that they have business practices, values and culture to control the risks in their businesses."
The 'London Whale' trades involved London-based trader Bruno Iksil, who bet billions of pounds on derivatives products, which later turned sour. They were then concealed from the bank's top management by several colleagues who have since been fired.
On Monday a grand jury indicted the two former traders Julien Grout and Javier Martin-Artajo for conspiracy and fraud for allegedly covering up the trading losses.
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