JPMorgan Chase faces penalties totaling roughly $350 million to settle claims by U.S. regulators that it failed to report trading data to market surveillance systems properly, the company said in a filing Friday with the Securities and Exchange Commission.
The largest U.S. bank disclosed that certain trading and order data from its corporate and investment bank division was not correctly transmitted to the firm’s trade monitoring platforms as required. Apart from paying the penalty, the resolution includes complete remediation and conducting an independent review.
“The Firm self-identified that certain trading and order data through the CIB was not feeding into its trade surveillance platforms,” JPMorgan said in the filing. “The Firm has completed enhancements to the CIB’s venue inventory and data completeness controls, and other remediation is underway. 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.”
Although the identified lapses are only a fraction of the total activity across the CIB, the data gap on one venue consisting of sponsored client access activity was “significant,” JPMorgan said.
In November, JPMorgan disclosed it was cooperating with investigations into whether the firm had fully complied with requirements to provide comprehensive trading and order data. The bank acknowledged that certain regulatory authorities had proposed monetary penalties related to potential lapses in reporting complete trading information as mandated, Bloomberg reported.
The New York City-based lender expects to pay the amount to two U.S. regulatory agencies while in advanced talks with a third, but it points out that “there is no assurance that such discussions will result in a resolution.”
However, the bank confirmed that these resolutions will not hamper client services.
JPMorgan has had data reporting errors before. In October, the lender was fined $15 million in civil monetary penalties by the Commodity Futures Trading Commission for failing to report more than 40 million swap transactions since November 2017. Further, JPMorgan inaccurately reported pre-allocated trades for at least 20 million cross-currency equity swaps.
In the Friday filing, JPMorgan also mentioned that it “faced actual and threatened litigation in Russia seeking payments on transactions that the Firm cannot make and is contractually excused from paying, under relevant sanctions laws.” The bank said its assets in Russia could be seized for not making a payment.
