JPMorgan Chase has reached an agreement to pay a total of $448 billion to US regulators for its failure to adequately monitor potential market misconduct in its global trading operations. The banking giant disclosed in a filing with the US Securities and Exchange Commission (SEC) that it has settled with an unnamed US regulator, resulting in an additional $100 billion in penalties on top of the $348 billion enforcement action imposed by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB).
In March, the OCC and FRB accused JPMorgan of engaging in “unsafe or unsound” banking practices, highlighting significant gaps in the trade surveillance program of its corporate and investment bank division. The OCC stated that the bank failed to effectively monitor the activities of its traders and clients, thereby failing to detect potential market misconduct across billions of trades on at least 30 global trading platforms.
Although JPMorgan did not disclose the identity of the third regulator involved, the bank acknowledged that it had identified issues with the feeding of trading and order data from its Corporate & Investment Bank (CIB) into its trade surveillance platforms. As a result, the bank has committed to continuously enhancing the reliability of its trade infrastructure and maintaining rigorous controls.
According to data from the Violation Tracker, a comprehensive database of corporate misconduct, JPMorgan has already paid nearly $40 billion since 2000 to resolve 277 enforcement actions and lawsuits related to toxic securities abuses, banking violations, investor protection violations, and other offenses. Despite these penalties, the New York-based bank recorded a net income of $49.6 billion last year.
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