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JPMorgan's London Whale Saga Ends Quietly as Fed Drops Its Order

JPMorgan's London Whale Saga Ends Quietly as Fed Drops Its Order

(Bloomberg) -- JPMorgan Chase & Co. has formally put to rest a particularly embarrassing chapter in its history: the so-called London Whale trading debacle that triggered a loss of at least $6.2 billion for the Wall Street bank.

With the Federal Reserve terminating a 2013 order against JPMorgan, regulators as of Thursday consider the case closed. The Fed said it’s dropping the matter “on evidence of substantial improvements by the firm,” the central bank said in a statement.

The Fed action had demanded that New York-based JPMorgan get a better handle on internal systems that allowed its Chief Investment Office to expose the bank to tremendous losses on derivatives bets. The other key regulator that had punished JPMorgan -- the Office of the Comptroller of the Currency -- brought an end to its case last month.

So concludes a drama that once led to a U.S. Senate investigation and a significant cut to Chief Executive Office Jamie Dimon’s pay. The trading losses also prompted about $1 billion in fines and an admission the lender violated securities law, along with criminal cases involving former bank employees.

The closing of the Fed order isn’t expected to have any business impact on JPMorgan. A bank spokesman declined to comment on Thursday’s announcement.

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott

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