Due to deficiencies in its trading surveillance program, JPMorgan Chase & Co. is subject to major regulatory fines from the Federal Reserve and the Office of the Comptroller of the Currency (OCC) totalling $348.2 million. The fines are the result of oversight gaps in the monitoring of client and firm trading activity for market misconduct during a nearly ten-year period, from 2014 to 2023.
One of the biggest banks in the US, JP Morgan Chase provides consumers, companies, and organizations with a wide range of financial services. With an extensive record spanning more than a century, JP Morgan is well-known for its proficiency in commercial banking, asset management, and investment banking. It also has a significant position in the worldwide finance industry. The bank has a major influence on the American financial system.
The OCC revealed that there were flaws in JPMorgan’s trading surveillance program, including failures to monitor billions of deals on at least thirty international trading platforms. JPMorgan Chase Bank was hit with a $250 million civil penalty by the OCC, along with a cease and desist order mandating the bank to fix the holes in its software. JPMorgan is required by the order to address the found shortcomings, get OCC clearance prior to bringing on additional trading venues, and hire a neutral party to conduct a thorough evaluation of the company’s trade surveillance program. The Treasury Department has received payment of the penalty amount.
The central bank of the United States is the Federal Reserve System (FRS). The Fed acts to ensure financial stability, and it is the primary regulator of member banks of the Federal Reserve System.
Applications for new charters, branches, capital, and other modifications to the banking system may be approved or denied by the Office of the Comptroller of the Currency. If banks under its control violate rules and regulations, they have the authority to take supervisory action against them.
Simultaneously, JPMorgan was penalized roughly $98.2 million by the Federal Reserve Board for comparable program shortcomings that were discovered in 2014 and the year before. JPMorgan admitted to expecting civil fines, citing inadequate reporting of trading data to monitoring systems. But the bank says it found the problems on its own and is actively trying to fix them, assuring customers that there won’t be any major service interruptions and emphasizing that there hasn’t been any staff misbehavior or harm to customers or the market as a whole.
JPMorgan did not provide an immediate response to requests for comment on the fines imposed by the regulators.
