JPMorgan Chase said it expects to pay an additional $100 million to an unnamed regulator to settle alleged trade surveillance failures that have already warranted significant fines by two other agencies.
In March, the Treasury Department’s Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB) issued penalties worth more than $348 million against JPMorgan for allegedly failing to surveil “billions” of transactions on 30 trading venues.
In a regulatory filing Wednesday, the bank disclosed a third U.S. regulator will require it to “pay a civil penalty of $100 million after offsets for amounts paid to the OCC and FRB.”
Included in the March settlements were extensive remediation of the trade surveillance issues and a requirement to hire an independent consultant, the bank said.
JPMorgan said it “self-identified that certain trading and order data” through its corporate and investment bank (CIB) “was not feeding into its trade surveillance platforms.”
“The firm has completed enhancements to the CIB’s venue inventory and data completeness controls, and other remediation is underway,” it said. “The firm has also performed a review of the data not originally surveilled, which is nearly complete, and has not identified any employee misconduct (or) harm to clients or the market.”
Although the identified trade surveillance gaps represented a “fraction” of overall activity across the CIB, “the data gap on one venue, which largely consisted of sponsored client access activity, was significant,” the bank admitted.
“The firm does not expect any disruption of service to clients as a result of these resolutions,” the disclosure said.
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