Operational risk events are materialized risks that generate financial losses, regulatory sanctions, reputational damage, or other negative impacts. Organizations categorize these events to identify patterns, quantify exposures, and strengthen controls. Common categories include internal fraud, external fraud, employment practices, client/product issues, physical asset damage, business disruption, and execution failures. The 2012 London Whale trading loss at JPMorgan Chase, resulting from inadequate risk controls and oversight, exemplifies a major operational risk event that led to over $6 billion in losses and significant regulatory scrutiny.