JPMorgan fined $348 million for trading oversight failures

JPMorgan Chase participates in multibillion-dollar transactions in financial markets around the world every day, but federal regulators said the bank's systems for sharing details of that activity with them have not been working properly for about a decade. These breaches cost it more than $348 million in fines – and more could follow.

On Thursday, the top federal banking regulator, the Office of the Comptroller of the Currency, fined JPMorgan $250 million for omissions. This action follows a $98.2 million penalty imposed by the Federal Reserve on March 8. The bank recently told investors in a public call that a third regulator was preparing a separate action that would likely come with its own monetary penalty.

The violations at the bank, which occurred between approximately 2014 and 2023, affected regulators who sought data on financial market activity to help detect instances of misconduct, such as insider trading. and market manipulation. JPMorgan did not maintain or share information about transactions made by clients and companies in connection with around 30 different trading platforms and venues, regulators said.

Brian Marchiony, a JPMorgan spokesman, said the bank discovered the problems on its own and informed regulators. JPMorgan does not expect client services to be disrupted as it works to resolve the issues, it said.

“Significant corrective actions have been taken and more are underway,” Marchiony said. “We found no employee misconduct or harm to customers or the market in our review of previously uncaptured data.”

Regulatory filings outlining the sanctions offered few details about what kind of information JPMorgan was failing to collect and report, saying only that the bank failed to account for “billions of instances of trading activity.” “. This could include messages about trading orders sent between JPMorgan employees and clients.

Regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, have also been repressed recently on how traders at big banks communicate with their clients, penalizing banks for allowing traders to use WhatsApp and other encrypted messaging services that aren't as easy to track as emails or voice calls recorded.

JPMorgan must monitor trading platforms, including exchanges like the New York Stock Exchange and online platforms like Tradeweb. Regulators did not say which sites were involved in the failures and Mr. Marchiony declined to name them.

An OCC spokeswoman declined to comment.

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