The Office of the Comptroller of the Currency fined JPMorgan Chase $250 million Thursday, and the Federal Reserve added a $98.2 million penalty, asserting the bank failed to adequately monitor client trading activities for market misconduct between 2014 and 2023.
JPMorgan “operated with gaps in trading venue coverage and without adequate data controls,” the OCC found, according to a Thursday statement.
The bank “failed to surveil billions of instances of trading activity on at least 30 global trading venues,” the OCC alleged. “These gaps and deficiencies … constitute unsafe or unsound banking practices.”
The OCC issued a cease-and-desist order requiring JPMorgan to correct the deficiencies, seek the agency’s non-objection before onboarding new trading venues, and to enlist an independent third party to conduct an assessment of the bank’s trade surveillance program.
JPMorgan neither admitted nor denied the findings. A representative for the bank told Bloomberg it doesn’t expect any disruption to client services as a result of Thursday’s order.
“As we disclosed last month, we self-identified the issue, significant remedial actions have been taken and others are underway,” the spokesperson said. “We have not found any employee misconduct or harm to clients or the market in our review of the previously uncaptured data.”
JPMorgan disclosed last month that certain trading and order data from JPMorgan’s corporate and investment bank division was not correctly feeding into its trade surveillance platforms as required.
“The Firm has completed enhancements to the CIB’s venue inventory and data completeness controls, and other remediation is underway,” JPMorgan said in its February filing. “The Firm has also performed a review of the data not originally surveilled, which is nearly complete, and has not identified any employee misconduct, harm to clients or the market.”
The identified lapses were a fraction of the total activity across the CIB, but the data gap on one venue consisting of sponsored client access activity was “significant,” JPMorgan said.
JPMorgan disclosed in November that it was cooperating with investigations into whether the bank had fully complied with requirements to provide comprehensive trading and order data. JPMorgan acknowledged that certain regulatory authorities had proposed monetary penalties, and the bank said it expected to pay the amount to two regulators and was in advanced talks with a third.
