The Federal Reserve and the Office of the Comptroller of the Coin (OCC) have fined banking giant JPMorgan Chase $348.20 million in a coordinated enforcement action.
Both the Fed and the OCC say JPMorgan has engaged in “unsafe or unsound banking practices” in connection with its trade surveillance program.
The OCC says JPMorgan had been operating with gaps in its trading surveillance program since 2019, leading to the bank’s failure to adequately monitor its traders and clients for potential market misconduct across billions of trading instances.
Meanwhile, the Fed says JPMorgan’s trade surveillance program fell short at points in time between 2014 and 2023. The Fed says the deficiencies allowed the multibillion-dollar lender’s corporate and investment banking division to operate without “adequate data oversight and reconciliation processes to achieve effective and comprehensive trade surveillance.”
In addition to the fine, the two supervisory authorities imposed a cease and desist order on JPMorgan, requiring the bank to take comprehensive measures to improve its trade surveillance program.
The OCC directs JPMorgan to develop an action plan that provides a detailed description of the steps necessary to bring its trade surveillance program into compliance, along with a reasonable timeframe for completion and the name of the person responsible is responsible for carrying out the corrective measures of the supervisor.
As for the Fed, the regulator is requiring the bank to engage an independent third party to review JPMorgan’s trading surveillance program in several areas, including measures to detect market misconduct and measures to investigate cases of unmonitored trading activity to deal with.
Since 2000, JPMorgan Chase has paid a total of $39.34 billion in fines imposed by U.S. regulators, enforcement agencies and lawsuits related to anticompetitive practices, securities misuse and other violations.
This is evident from data from the Violation Tracker, an extensive database for corporate misconduct.
The bank made $49.6 billion in profit last year.
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