Fed and OCC fine JPMorgan Chase $348.2M for inadequate monitoring

The Federal Reserve Board yesterday announced it has issued an enforcement action against JPMorgan Chase & Co., and fined the firm approximately $98.2 million for an inadequate program for monitoring firm and client trading activities for market misconduct. The Board's action requires JPMorgan Chase to review and take corrective action to address the firm's inadequate monitoring practices, which occurred between 2014 and 2023.

The Board's action was taken in coordination with the Office of the Comptroller of the Currency. The penalties announced by the Board and the Office of the Comptroller of the Currency total approximately $348.2 million.

The OCC's assessment of a $250 million civil money penalty against JPMorgan Chase Bank, N.A. was also announced yesterday. The OCC reported it found that the bank 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. The OCC found that the bank failed to surveil billions of instances of trading activity on at least 30 global trading venues. These gaps and deficiencies in the bank’s trade surveillance program constitute unsafe or unsound banking practices.