by The Compliance Exchange on June 1, 2012
Federal regulators are using powers they gained in the Dodd-Frank financial overhaul law to ramp up an inquiry into the recent trading blunders at J.P. Morgan Chase JPM & Co., people close to the investigation said.
Investigators in the enforcement division of the Commodity Futures Trading Commission are issuing subpoenas requesting emails and other internal J.P. Morgan documents, the people said.
The CFTC has said it will ‘read broadly’ a new law allowing it to police certain ‘manipulative or deceptive conduct.’
The probe focuses on what J.P. Morgan traders told their supervisors and internal risk-management staff as their wrong-way bets started to sour, the people said. If investigators find that employees made deceptive statements to superiors, that could constitute fraud under their authority to police the so-called swaps market.
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