By Brett Wolf and Carrick Mollenkamp and Emily Flitter
NEW YORK, Jan 11 (Reuters) - A U.S. regulatory probe of JP Morgan Chase & Co is expected to result in an order that the bank correct lapses in how it polices suspect money flows, in an action expected as soon as Friday, people familiar with the situation said.
The action would be in the form of a cease-and-desist order, which regulators use to force banks to improve compliance weaknesses, the sources said.
The order is expected to be issued by the Office of the Comptroller of the Currency and the Federal Reserve.
JP Morgan is not expected to pay a monetary penalty, according to one person familiar with the situation.
The Treasury Department's anti money-laundering unit, the Financial Crimes Enforcement Network, also could take a separate action against the bank.
A JP Morgan spokeswoman declined comment.
The status of the inquiry could change and the timing of the action could extend to next week or later.
The JP Morgan inquiry dates back several months, according to people familiar with the probe. Under the order, the bank is expected to be required to bolster systems it uses to monitor risk and transactions.
The order is the latest action that U.S. regulators have taken this year to force banks to tighten their anti money- laundering systems, which are supposed to flag suspect transactions from sanctioned countries or those from customers with ties to drug trafficking or terrorism.
Britain-based bank Standard Chartered Plc agreed to pay a total of $667 million to U.S. and state regulators to resolve anti-money laundering probes, while HSBC Holdings Plc , also headquartered in Britain, agreed in December to pay $1.9 billion to settle a U.S. inquiry.
In April, the Comptroller of the Currency identified major lapses in compliance systems at U.S. bank Citigroup Inc, though Citigroup didn't pay a monetary penalty. (Reporting by Carrick Mollenkamp and Emily Flitter of Reuters, and Brett Wolf of the Compliance Complete service Thomson Reuters Accelus; Editing by David Holmes)