The New York Times reports federal investigators are “using taped phone conversations to build criminal cases related to the multibillion-dollar trading loss at JPMorgan Chase, focusing on calls in which employees openly discussed how to value the troubled bets in a favorable way.”
This year, the bank lost $5.8 billion due to a bad trade revealed in May. In response, it has shut down the division that was responsible for the mistake, cleared out managers who were involved and re-examined its risk management practices.
Read: JPMorgan trading blunder balloons to $5.8 billion
The Times says investigators are focusing on four people who worked for the London team responsible for the loss.
The report adds, “The Federal Bureau of Investigation could make some arrests in the next several months, said one person who spoke on the condition of anonymity because the inquiry was ongoing.”
Read: More trouble for JPMorgan
The bank reports its earnings tomorrow, and analysts will likely want an update on the fallout from the trading loss.
Overall, JPMorgan has weathered the loss well; analysts polled by FactSet are expecting higher revenue this quarter.