JPMorgan has been fined $348 million for trading oversight deficiencies

JPMorgan Chase plays a role in trillions of dollars of trading in financial markets around the world every day, but federal regulators said the bank’s systems for sharing details of that activity with them had not been working properly for about a decade. These violations cost the country more than $348 million in fines – and more could follow.

On Thursday, the bank’s top federal regulator, the Office of the Comptroller of the Coin, fined JPMorgan $250 million for the negligence. The action followed a $98.2 million fine from the Federal Reserve on March 8. The bank recently told investors in a public statement that a third-party regulator is preparing a separate action that will likely involve its own fine.

The breaches at the bank, which took place from about 2014 to 2023, affected regulators seeking data on financial markets activity to detect cases of misconduct such as insider trading and market manipulation. JPMorgan did not store or share information about customer and corporate transactions related to about 30 different trading venues and platforms, regulators said.

Brian Marchiony, a spokesman for JPMorgan, said the bank discovered the problems on its own and notified regulators. JPMorgan did not expect customer service to be disrupted as it works to resolve the issues, he said.

“Significant corrective actions have been taken and others are underway,” Mr Marchiony said. “We found no employee misconduct or harm to customers or the marketplace in our review of the previously unrecorded data.”

The documents filed by regulators outlining the fines offered few details about the type of information JPMorgan failed to collect and report, stating only that the bank failed to consider “billions of instances of trading activity.” These could be messages about trade orders sent between JPMorgan employees and customers.

Regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, have also lately been cracking down on the way traders at major banks communicate with their customers, punishing the banks for allowing traders to use WhatsApp and other to use encrypted messaging services that are not that good. easy to track as emails or recorded voice calls.

JPMorgan must monitor trading platforms, including exchanges such as the New York Stock Exchange and online platforms such as Tradeweb. The regulators did not specify which locations were involved in the counterfeits and Mr. Marchiony declined to name them.

A spokeswoman for the OCC declined to comment.