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JPMorgan Chase & Co. to Pay $100 Million in Settlement Over Trade-Surveillance Deficiencies

JPMorgan to settle third surveillance case for $100 million, totaling $448 million in regulatory fines.

By Mackenzie Crow

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5/1, 17:07 EDT
JP Morgan Chase & Co.
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Key Takeaway

  • JPMorgan Chase & Co. expects to pay $100 million in a settlement with the CFTC over trade-surveillance deficiencies, totaling $448 million in regulatory settlements.
  • The bank's surveillance program failed to adequately monitor trading on at least 30 global venues, as identified by the OCC and Federal Reserve.
  • Despite these settlements, JPMorgan commits to enhancing its trade infrastructure and assures no disruption to client services.

Regulatory Settlements

JPMorgan Chase & Co. is poised to resolve a series of regulatory complaints related to its trade-surveillance program, with the latest expected settlement amounting to $100 million. This follows previous settlements with two other regulators, totaling $348 million. The Commodity Futures Trading Commission (CFTC) is the agency involved in the most recent inquiry, although it has not officially commented on the matter. Earlier, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve had identified deficiencies in JPMorgan's surveillance program, highlighting gaps in monitoring trading activities across various global trading venues.

Surveillance Program Deficiencies

The OCC's investigation revealed that JPMorgan's trade-surveillance program failed to adequately monitor billions of trading instances on at least 30 global trading venues. This oversight was attributed to gaps in the bank's monitoring of venues and data controls. Despite these findings, JPMorgan did not admit or deny the allegations. The bank's filing acknowledged that while the identified gaps represented only a fraction of its overall Wall Street operations, the data gap for one particular venue was significant.

Financial Implications and Responses

JPMorgan anticipates that the $100 million settlement with the CFTC will include "offsets" for amounts already paid to the OCC and the Federal Reserve, effectively reducing the financial impact of the cumulative settlements. The bank has expressed its commitment to maintaining rigorous controls and continuously enhancing the reliability of its trade infrastructure. Despite the financial outlay for these settlements, JPMorgan assures that its services to clients will not be disrupted.