Banking giant JPMorgan has tentatively agreed to pay $13 billion (£8 billion) to settle allegations surrounding the quality of mortgage-backed securities it sold in the run-up to the 2008 financial crisis.
If the agreement is finalised it would be the US government's highest-profile enforcement action related to the financial meltdown that plunged the economy into the deepest recession since the Great Depression of the 1930s.
The source said Attorney General Eric Holder, Associate Attorney General Tony West, JP Morgan chief executive Jamie Dimon and the bank's general counsel, Stephen Cutler, negotiated the tentative settlement in a Friday night phone call.
For the last few years we have heard time and again, bank chief executives and others saying: " We are trying to clean things up, we get it, we know we have to change our culture."
And here low and behold, this was going on in London in a big international bank about 18 months ago - and then management tried to cover it up.
They did not want to acknowledge to the authorities what was really going on.
What was striking to me today was that authorities are clearly concerned that the message has not got right down to the trading floor, where people are actually doing these deals day in day out.
There have been lots of changes to the rules, but if there are loopholes still there which clearly there appear to be, that makes it much harder for the people at the top of banks who do try to persuade us all the time that they get it and want things to change to be taken seriously.
It makes it harder for the rest of us to trust what banks are getting up to.
We've said it before, I'll say it again it is difficult for our economy and the economy right around the world to get motoring again if that relationship between banks and the public is still fractured in some way.
And that is what this story is a reminder of to me.
Investment bank JP Morgan's combined £572 million fine today by UK and US regulators over the 'London Whale' trading scandal is the second biggest banking fine, behind HSBC's £1.1 billion money laundering penalty in 2012.
Here is a breakdown of the biggest fines in banking history:
In a statement, the FCA's director of enforcement and financial crime, Tracey McDermott, said:
When the scale of the problems at JPMorgan became apparent, it sent a shock-wave through the markets. Maintaining the integrity of markets is a key part of our wholesale conduct agenda. We consider JPMorgan’s failings to be extremely serious such as to undermine the trust and confidence in UK financial markets.
This is yet another example of a firm failing to get a proper grip on the risks its business poses to the market. There were basic failings in the operation of fundamental controls over a high risk part of the business.
Senior management failed to respond properly to warning signals that there were problems in the CIO. As things began to go wrong, the firm didn’t wake up quickly enough to the size and the scale of the problems. What is worse, they compounded this by failing to be open and co-operative with us as their regulator.
Firms must learn the lessons from this incident and ensure that they have business practices, values and culture to control the risks in their businesses.
– Tracey McDermott, FCA director of enforcement and financial crime