WASHINGTON — The financial penalty is staggering. JPMorgan Chase & Co. will pay $920 million for trading losses that shook the financial world last year.
But the bigger price may be a few words rarely uttered in settlements with U.S. regulators: The nation’s largest bank is also admitting wrongdoing.
JPMorgan’s acknowledged failure of oversight in the $6 billion trading loss is a first for a major company since the Securities and Exchange Commission reversed its longstanding practice of allowing firms to pay fines without accepting fault.
The admission, made Thursday as part of a broad settlement with U.S. and U.K. regulators, could leave the bank vulnerable to millions of dollars in lawsuits. The legal burden of proof in such private litigation is lower than in cases brought by the government.
“The floodgates are opening,” said Anthony Sabino, an attorney and business professor at St. John’s University in New York. “This is the kind of thing plaintiffs’ lawyers salivate over.”