JPMorgan Chase has tripled its estimate of recent losses from trading in complex financial derivatives to $US5.8 billion.
The US bank said the executives responsible had been dismissed without severance pay and the bank would be clawing back two years of their pay.
Despite the disclosure, JPMorgan also reported a surprisingly strong three-month net profit of $US4.96 billion.
The BBC reports the bank's shares ended Friday trading in New York 5.8% higher on the news.
The profit figure for the three months to 30 June was down 8.7% from the same period last year, but was nonetheless much higher than analysts' expectations.
When the Wall Street firm first announced the loss at its chief investment office in May, it said it amounted to at least $US2 billion.
However, in its latest financial results, the bank said that it had recorded a $4.4bn loss in the second quarter of the year due to the trading position, on top of a $1.4bn loss in the first three months of the year.
That $US1.4 billion figure was $US459 million bigger than the bank had initially calculated, forcing JPMorgan to restate its first quarter results.
It also said that it expected another $US700 million to $US1.7 billion in losses from the derivatives trading, bring losses to a potential total of $7.5bn.
The bank also said it had found evidence that some traders may have been trying to hide their losses.
It blamed the restatement on the fact that "certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter".
