JPMorgan Chase has been fined $100m by the CFTC for failing to capture billions of dollars in its surveillance systems.
According to Banking Dive, this fine concludes a multiyear probe into the bank’s surveillance practices. The investigation spanned from 2014 through 2021, during which time JPMorgan failed to rectify significant surveillance gaps, violating CFTC regulations.
Despite acknowledging the scope and causes of the surveillance data gaps, JPMorgan neither admitted nor denied the findings. However, it stated that the surveillance gaps were fully rectified by 2023.
As part of the settlement, JPMorgan agreed to pay a civil monetary penalty of $200 million, with up to $100 million to be credited for amounts paid in parallel actions levied by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve in March. The total penalty amounted to $348.2 million. Additionally, the OCC’s cease-and-desist order requires JPMorgan to correct deficiencies, seek non-objection before onboarding new trading venues, and enlist an independent third party to assess its trade surveillance program.
CFTC Commissioner Kristin N. Johnson emphasized the importance of JPMorgan’s admission of compliance failures, stating that such acknowledgments are crucial for remediation efforts and may deter future misconduct.
A JPMorgan spokesperson, responding to Bloomberg’s request for comment, reiterated that the bank had self-identified the issue and taken significant remedial actions. The bank asserted that it had not found any employee misconduct or harm to clients or the market during its review of the previously uncaptured data.
The surveillance gaps primarily arose due to discrepancies in JPMorgan’s surveillance of trading on multiple venues and trading systems while onboarding a new trading exchange in 2021. The bank failed to configure certain data feeds, resulting in gaps in its trade surveillance.
Copyright © 2024 RegTech Analyst
Copyright © 2018 RegTech Analyst
