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SEC Pressed JPMorgan on Prop Trading Before Loss

Agency inquired about bank's trading starting in mid-2011.

By Dawn Kopecki, Bloomberg | Updated on December 12, 2012

JPMorgan Chase & Co. was pressed by U.S. regulators to strengthen investor disclosures on proprietary trading almost a year before a wrong-way bet on credit derivatives cost the bank at least $6.2 billion.

The Securities and Exchange Commission asked Chief Financial Officer Douglas Braunstein to provide information about the bank’s so-called principal transactions revenue and proprietary trading, according to letters between the agency and the company from June 15 of last year through Feb. 17 that were made public yesterday. Proprietary trading, in which banks make bets with their own money, would be restricted under a Dodd-Frank Act provision known as the Volcker rule.

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