JPMorgan fined $200 mn for recordkeeping violations
JPMorgan fined $200 mn for recordkeeping violations

NEW YORK – JPMorgan Chase was hit with $200 million in fines after admitting to “widespread” recordkeeping violations including use of unapproved messaging apps and failing to preserve communications, US regulators announced Friday.

“From at least January 2018 through at least November 2020, JPMorgan employees often communicated about securities business matters on their personal devices, using text messaging applications (including WhatsApp) and personal email accounts,” the US Securities and Exchange Commission (SEC) said.

“None of these records was preserved by the firm. The failure was firm-wide, and involved employees at all levels of authority.”
The regulator, which fined the company $125 million, said tens of thousands of messages were exchanged using these methods during the period under investigation.

In addition, JPMorgan will pay a $75 million penalty to the Commodity Futures Trading Commission (CFTC) said to settle its own charges over the recordkeeping failures.

The SEC said the company admitted that employees at its securities unit violated recordkeeping laws.

“Recordkeeping requirements are core to the Commission’s enforcement and examination programs and when firms fail to comply with them, as JPMorgan did, they directly undermine our ability to protect investors and preserve market integrity,” the SEC’s enforcement chief Gurbir S Grewal said in a statement.

As a result of its findings at JPMorgan, the SEC said it had launched an investigation into recordkeeping practices at other financial institutions, without saying which ones.

SEC Chair Gary Gensler noted previous examples where companies used “unofficial communications channels” that undermined regulatory oversight.

“Ultimately, everybody should play by the same rules, and today’s charges signal that we will continue to hold market participants accountable for complying with our time-tested recordkeeping requirements,” he said.

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