Here's the official statement from the Federal Reserve:
The Federal Reserve Board on Monday issued two consent Cease and Desist Orders against JPMorgan Chase & Co., New York, New York (JPMC), a registered bank holding company. The first order requires JPMC to take corrective action to continue ongoing enhancements to its risk-management program and its finance and internal audit functions, particularly in regard to JPMC's Chief Investment Office (CIO). The Board's order follows the disclosure of significant losses in a large synthetic credit portfolio that was managed by the CIO. The second order requires JPMC to take corrective action to enhance its program for compliance with the Bank Secrecy Act and other anti-money laundering requirements at JPMC's various subsidiaries.
None of the required actions seem very harsh. There are no fines. No one is singled out for wrong-doing. Depending on what standard the Fed uses to review the reforms it is requiring, this could be nothing more than a public scolding. A slap on the wrist, in other words.
The most serious measure is probably the demand that the board be given more oversight of risk-management at JP Morgan. Within 60 days, JPMorgan is required to submit a plan to enhance board supervision of risk, finance functions and internal audit. No CEO likes to be told the board is going to be looking more closely over his shoulder. The order also demands changes to the way senior managers are compensated and the way the CIO is operated.
One very specific thing the order requires is "measures to ensure that the fundamental elements of JPMC's risk management program are effective and implemented consistently across the firm with respect to Trading activities."
That seems to be aimed at eliminating the possibility that one trading desk at the bank could be operating under different measure of risk — as happened in the case of the CIO. When the bank scrapped the CIO's approach to "Value at Risk," the units nearly doubled, according to reports.
—By CNBC's John Carney; Follow him on Twitter