JPMorgan Chase Faces $350 Million Fine Over Trading Surveillance Lapses

JPMorgan Chase has disclosed in a regulatory filing that it is expecting to incur fines of approximately $350 million from two undisclosed U.S. regulators due to deficiencies in its trading surveillance practices. According to the bank's annual report filed on Friday, it revealed that it had identified issues where certain trading and order data from its corporate and investment bank (CIB) were not being properly integrated into its trade surveillance platforms.

The bank stated, "Certain trading and order data through the CIB was not feeding into its trade surveillance platforms." Despite this lapse, JPMorgan Chase clarified that its internal investigation, which is nearing completion, has not revealed any instances of employee misconduct, harm to clients, or market impact. However, it did acknowledge significant data gaps related to sponsored client activity on one venue.

In response to these findings, the bank has initiated remedial efforts, including enhancements to the CIB's venue inventory and data completeness controls. As part of the pending settlements with the two regulators, JPMorgan Chase will be obligated to "complete its remediation, engage an independent consultant, and pay aggregate civil penalties of approximately $350 million."

Furthermore, the bank disclosed that negotiations with a third U.S. regulator are still ongoing, although there is no assurance that these discussions will lead to a resolution. This transparency regarding regulatory matters underscores JPMorgan Chase's commitment to addressing compliance issues and maintaining regulatory standards within its operations.

The bank's proactive approach to addressing these deficiencies reflects its dedication to upholding integrity and transparency in its trading surveillance practices. It remains focused on resolving regulatory concerns and ensuring robust oversight to mitigate future risks.

By fLEXI tEAM