The Office of the Comptroller of the Currency (OCC) announced a $250 million civil money penalty against JPMorgan Chase Bank, N.A. (JPMC) related to deficiencies in its trade surveillance program.
The OCC found that JPMC operated with gaps in trading venue coverage and without adequate data controls required to maintain an effective trade surveillance program. Generally, trading venues are systems or electronic platforms, operated by investment firms or market operators, that bring together multiple third party buying or selling interests in financial instruments to perform a transaction. The OCC expects banks to perform trade surveillance to monitor the market conduct of its traders and clients as part of its market conduct risk control framework. The OCC found that JPMC failed to surveil billions of instances of trading activity on at least 30 global trading venues. These gaps and deficiencies in JPMC’s trade surveillance program constitute unsafe or unsound banking practices.
The OCC also issued a cease and desist order requiring JPMC to take broad and comprehensive corrective actions to improve its trade surveillance program. The order requires the bank to correct the deficiencies, to seek the OCC’s non-objection before onboarding new trading venues, and to obtain an independent third party to conduct a trade surveillance program assessment.
The OCC’s enforcement actions are separate from, but coordinated with, the Board of Governors of the Federal Reserve System which announced a related enforcement action today against JPMorgan Chase & Co.
The OCC penalty has been paid to the U.S. Department of the Treasury.
Related Links
- Civil Money Penalty (PDF)
- Cease and Desist Order (PDF)
Source: OCC
Federal Reserve Board issues enforcement action against JPMorgan Chase & Co. and fines the firm approximately $98.2 million for an inadequate program to monitor firm and client trading activities for market misconduct
The Federal Reserve Board issued an enforcement action against JPMorgan Chase & Co. and fined the firm approximately $98.2 million for an inadequate program to monitor firm and client trading activities for market misconduct. The Board’s action requires JPMorgan Chase to review and take corrective action to address the firm’s inadequate monitoring practices, which occurred between 2014 and 2023.
The Board’s action was taken in coordination with the Office of the Comptroller of the Currency. The penalties announced by the Board and the Office of the Comptroller of the Currency total approximately $348.2 million.
Also on Thursday, the Board announced the execution of a written agreement with First & Peoples Bancshares, Inc., of Russell, Kentucky, dated March 13, 2024.
Source: Federal Reserve
