JPMorgan Chase Paying $348,200,000 Penalty, Issued Cease-and-Desist Order Over ‘Unsafe or Unsound’ Banking Practices

The Federal Reserve and the Office of the Comptroller of the Currency (OCC) have imposed a $348.20 million fine on banking giant JPMorgan Chase in a coordinated enforcement action. Both the Fed and the OCC claim that JPMorgan engaged in "unsafe or unsound banking practices" related to its trade surveilling program. The OCC states that since 2019, JPMorgan operated with gaps in its trade surveillance program, resulting in the bank's failure to adequately monitor its traders and clients for potential market misconduct in billions of trading instances.

Meanwhile, the Fed claims that JPMorgan's trade surveillance program was deficient at certain points between 2014 and 2023, allowing the trillion-dollar lender's corporate and investment bank division to operate without "adequate data oversight and reconciliation processes to achieve effective and comprehensive trade surveillance." In addition to the monetary penalty, the two regulatory bodies issued cease-and-desist orders to JPMorgan, requiring the bank to take extensive actions to improve its trade surveillance program.

The OCC ordered JPMorgan to create an action plan that details the steps needed for its trade surveillance program to achieve compliance, along with a reasonable timeline for completion and the name of the person responsible for accomplishing the regulator's remedial measures. As for the Fed, the regulator requires the bank to engage an independent third party to assess JPMorgan's trade surveillance program in various areas, including measures to detect market misconduct and measures to address instances of non-surveilled trading activities.