US-based investment banking company JPMorgan Chase (JPMC) has been fined $348.2m over its failure to monitor the company and client trading activities for market misconduct.
The US bank regulators, including the Federal Reserve and the Office of the Comptroller of the Currency (OCC), imposed the fine in separate statements.
The US Federal Reserve fined the company around $98.2m for an inadequate program to monitor firm and client trading activities for market misconduct.
It required JPMC to review and take corrective action to address the firm’s inadequate monitoring practices, which occurred between 2014 and 2023.
In addition, the OCC imposed a $250m civil money penalty against the company, over shortcomings in its trade surveillance program.
The OCC found that JPMC failed to monitor billions of instances of trading activity on at least 30 global trading venues, which are considered unsafe banking practices.
It has ordered JPMC to take certain corrective measures to improve its trade surveillance program to correct the deficiencies in monitoring the trading activities.
The bank was also ordered to seek the OCC’s permission before onboarding new trading venues and conduct a trade surveillance program assessment by an independent third party.
OCC in its statement said: “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 OCC 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.”
Last month, JPMC announced through its filing to the US Securities and Exchange Commission (SEC) that it may be fined around $350m for incomplete trading data reporting.
JPMC in its filing said: “While the identified gaps represent a fraction of the overall activity across the Corporate and Investment Bank (CIB), the data gap on one venue, which largely consisted of sponsored client access activity, was significant.”
