JPMorgan Chase anticipates reaching a settlement with a third U.S. regulator, which will involve paying a $100 million penalty, the bank disclosed Wednesday.
This disclosure comes less than two months after the bank resolved investigations by two other regulators regarding deficiencies in its monitoring of client trading activities between 2014 and 2023.
In its quarterly report filed with the Securities and Exchange Commission, JPMorgan said it needs to pay the new penalty "after offsets for amounts” it paid to the Office of the Comptroller of the Currency and the Federal Reserve. The bank did not identify the third regulator, but Bloomberg suggested it is the Commodity Futures Trading Commission, citing a person familiar with the matter.
A CFTC representative declined to comment to the publication.
In March, the OCC fined JPMorgan Chase $250 million, and the Fed added another $98.2 million, bringing the total to $348.2 million.
The bank “failed to surveil billions of instances of trading activity on at least 30 global trading venues,” the OCC said at the time. “These gaps and deficiencies … constitute unsafe or unsound banking practices.”
JPMorgan did not admit to or deny those claims.
The OCC’s cease-and-desist order required JPMorgan to correct the deficiencies identified, seek the agency’s approval before onboarding new trading venues, and hire an independent third party to review the bank’s surveillance program.
JPMorgan noted Wednesday that it has been responding to government inquiries into its trade surveillance platforms. It has completed the required enhancements to its corporate and investment bank division inventory and data completeness controls while other rectifications are ongoing, the bank said.
“While the identified gaps represent a fraction of the overall activity across the [corporate and investment bank], the data gap on one venue, which largely consisted of sponsored client access activity, was significant,” JPMorgan said in its filing. “The Firm is dedicated to maintaining rigorous controls and continuously enhancing the reliability of its trade infrastructure.”
In November, JPMorgan disclosed that it was cooperating with investigations into whether the bank had fully complied with requirements to provide comprehensive trading and order data.
In February, JPMorgan said in its filing that it could face penalties totaling roughly $350 million to settle claims by two U.S. regulators and is in “advanced negotiations” with a third, clarifying “there is no assurance that such discussions will result in a resolution.”
