Big Banks Cited For Weak Money Laundering Protections

Published: 18 January 2013


US regulators have ordered banking giant JP Morgan Chase to revise its money laundering protection systems, which they said contained “deficiencies” that could leave the bank vulnerable to use by criminal groups. 

The Federal Reserve and the Office of the Comptroller of the Currency released parallel orders against the bank on Monday, citing a pattern of faulty risk management that left JP Morgan with a $6 billion trading loss last year.

JP Morgan is the second major bank the US government has targeted for insufficient money-laundering protections in recent months. The British bank HSBC paid a $1.9 billion fine in December after an investigation by the Justice Department found it had laundered $881 million for drug cartels in Mexico and Colombia.

Speaking on the JP Morgan Chase case, University of Maryland Law School professor Michael Greenberg told NPR’s Jim Zarroli Tuesday that while the move was promising, it did not go far enough. “It's a step in the right direction. But overall...these banks are getting away with what amounts to traffic tickets to the rest of us.”