JP Morgan Chase hit with $348m in fines related to its trade surveillance programme
JP Morgan Chase has been hit with two fines from regulators in the US over alleged deficiencies in its trade surveillance programme.
JP Morgan Chase fined $348m by US regulators
In two separate but coordinated investigations, the Office of the Comptroller of the Currency (OCC) issued a $250 million civil money penalty against the bank, while the US Federal Reserve fined the firm approximately $98.2 million.
In a statement, the OCC says it “expects banks to perform trade surveillance to monitor the market conduct of its traders and clients as part of its market conduct risk control framework”.
The regulator adds: “The OCC found that JPMC failed to surveil billions of instances of trading activity on at least 30 global trading venues. These gaps and deficiencies in JPMC’s trade surveillance programme constitute unsafe or unsound banking practices.”
Along with the fine, which the OCC says has now been paid to the US Department of the Treasury, the regulator has also issued a cease and desist order requiring the bank “to correct the deficiencies, to seek the OCC’s non-objection before onboarding new trading venues, and to obtain an independent third party to conduct a trade surveillance programme assessment”.
In a separate statement, the US Federal Reserve says it “issued an enforcement action against JPMorgan Chase & Co and fined the firm approximately $98.2 million for an inadequate programme to monitor firm and client trading activities for market misconduct”.
The Fed adds that its action requires the bank “to review and take corrective action to address the firm’s inadequate monitoring practices, which occurred between 2014 and 2023”.
Together, the combined fines total approximately $348.2 million.
When contacted by FinTech Futures, a spokesperson from the bank says that the issue was self-identified, and that “significant remedial actions” have now been taken while “others are underway”.
The spokesperson says that the bank has “not found any employee misconduct or harm to clients or the market in our review of the previously uncaptured data”, adding: “We do not expect any disruption of service to clients as a result of these resolutions.”
