JP Morgan Chase agreed to pay $125 million to the Securities Exchange Commission and $75 million to the Commodity Futures Trading Commission for allowing unapproved communications since at least 2018, according to the regulatory agencies.
According to SEC officials who spoke to reporters, the failure to preserve offline conversations violated federal securities law by leaving regulators blind to communications between the bank and its clients.
“Since the 1930s, recordkeeping and books-and-records obligations have been an essential part of market integrity and a foundational component of the SEC’s ability to be an effective cop on the beat,” said SEC Chair Gary Gensler. “As technology changes, it’s even more important that registrants ensure that their communications are appropriately recorded and are not conducted outside of official channels in order to avoid market oversight.”
JP Morgan Chase employees often communicated about securities business matters on their personal devices, using text messages, WhatsApp and personal email accounts. When the SEC subpoenaed the bank during that time period JP Morgan often did not search for relevant records kept on its employees devices.
In September 2020 JP Morgan Chase was also fined $920 million for engaging in two separate year-long market manipulation schemes in the precious metals and US Treasuries markets. JP Morgan Chase reported a net income of $11.7 billion in 3Q21.