More bad news for JPMorgan Chase: The banking giant is expected to be hit with formal action by US regulators over perceived weaknesses in its anti-money-laundering system, as part of a wider crackdown on the financial industry, reports the Wall Street Journal. It doesn't look like there will be fines levied in this case, but sources say JPMorgan will likely receive a cease-and-desist order from the Office of the Comptroller of the Currency, which is expected to require the bank to strengthen its procedures and do a review of past transactions. Banks currently must alert the feds when it notices suspicious activity or cash transactions in excess of $10,000.
The moves against JPMorgan come a week after regulators addressed the directors and executives of more than a dozen financial institutions using what the Journal describes as an "unusually blunt tone." A senior bank exec relays his colleague's impression of the meeting: "It was a spanking." OCC's director said that regulations were being more firmly enforced than before the financial crisis. "Passable is not acceptable," he said. "It's important for the public to know that regulators are doing their job." (Read more JPMorgan Chase stories.)