J.P. Morgan is looking to clean up its act in a big way, and according to one recent Wall Street Journal (WSJ) report, the company’s compliance sector is about to receive a huge boost. The report says J.P. Morgan plans to spend an additional $4 billion and commit 5,000 extra employees to risk and compliance this year to clean up the company’s issues.
“Fixing our controls issues is job number one,” Chief Executive Officer James Dimon told the WSJ in an interview. “This is a huge investment of people, time and money… but it will make us stronger in the long run.”
J.P. Morgan has spent more than $17 billion on legal fees since 2008, according to securities filings. An analysis by FBR Capital Markets reveals that tab is more than any of the company’s financial rivals, even similarly embattled Bank of America ($16.1 billion). The bank also operates under four different regulatory enforcement actions—more than any other financial institution—and still faces at least seven different investigations by the U.S. Department of Justice.
The largest portion of the increased compliance spending will come from increased staffing. The company plans to hire 3,000 people to the bank’s control staff, while an additional 2,000 people will be re-assigned to risk and compliance from within the business division. According to the WSJ, this will bring J.P. Morgan’s total risk and compliance staff up to 15,000, more than double the staff’s size from the start of 2012.
The company has also hired consultants from McKinsey & Co., Ernst & Young and other firms to help with compliance issues. J.P. Morgan estimates it has provided 750,000 hours of training on risk and compliance issues in the past year.