Regulators slap JPMorgan Chase with nearly $350 million in fines for shortfalls in monitoring trading activities – including for misconduct

Fines of nearly $350 million were assessed against JPMorgan Chase Bank, N.A. (JPMC) Thursday related to deficiencies in the company’s trade surveillance program, including inadequacies in monitoring trading activities for market misconduct, two regulators announced in separate actions.

The Federal Reserve and the Office of the Comptroller of the Currency (OCC) said the fines – $98.2 million by the Fed and $250 million by the OCC – were separate, but coordinated, actions by the two regulators. The OCC also issued a cease-and-desist order against JPMC.

The Fed said its fine was prompted by the company’s “inadequate program to monitor firm and client trading activities for market misconduct.” The agency said it is now requiring JPMC to review and take corrective action to address the firm’s inadequate monitoring practices. Those practices occurred between 2014 and 2023, the agency said.

The OCC said its fine emanated from the agency’s finding 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 national bank regulator said.

It asserted that the agency “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 also said 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, OCC said, constitute unsafe or unsound banking practices.

The OCC said the fine it assessed has been paid to the U.S. Treasury.

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

OCC Assesses $250 Million Civil Money Penalty Against JPMorgan Chase Bank, N.A. Related to Bank’s Trade Surveillance Program