The CFTC announced a $200 million fine Thursday against JPMorgan Securities for trade surveillance gaps created during the onboarding of a new system in 2021. The CFTC’s fine will be offset by $100 million, money the bank will pay to the U.S. Treasury’s Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board as part of a $348 million settlement announced in March for related trade surveillance failures.
JPMorgan previously disclosed it would pay a $100 million fine to a third regulator, now revealed as the CFTC, for the trade surveillance lapses.
The details: In 2021, JPMorgan discovered that it had not been properly surveilling trades on up to 30 global trading venues, dating back to 2014. In one case, JPMorgan failed to surveil billions of trades from one trading venue, mostly related to trades “conducted on a U.S. designated contract market and certain registered foreign boards of trade open to trading by U.S. customers,” according to the CFTC’s order.
JPMorgan disclosed the surveillance lapses to the CFTC in 2021, after the bank signed a 2020 resolution with the agency regarding spoofing and attempted trade manipulation by its precious metals trading desk.
Company response: In an emailed response, a JPMorgan spokesperson referred back to the bank’s disclosure on the fine, noting it self-disclosed the issues, “significant” remediation is underway, and no customers were harmed.
