The Financial Services Authority (FSA) has opened an investigation into the multi-billion pound trading losses built up by JP Morgan traders, including the infamous London Whale.
The regulator revealed it was conducting enforcement action against JP Morgan as the bank was issued two supervisory notices in the US.
The Federal Reserve and the Office of the Comptroller of the Currency gave the bank 60 days to deliver a plan to improve its internal risk oversight and audit.
According to the Daily Telegraph the FSA has been analysing the £3.7 billion losses for some time, although it is not clear when the regulator moved from analysis to investigation.
JP Morgan chief executive Jamie Dimon stunned the City when he first disclosed the losses in May 2012.
The Financial Times reported that the JP Morgan board had resolved to dock Dimon’s pay- he earned more than $20 million in 2011, according to the paper- in a gesture designed to hold him accountable for the alleged failures.
The paper also said that an internal report into the episode is also expected to be published this week.
The FSA said: ‘In addition to its extensive supervisory agenda, the FSA is continuing to conduct a formal enforcement investigation into the trading losses. Conclusions will be reached in the enforcement investigation in due course and any further appropriate action determined at that time.’