JPMorgan fined $ 250 million for problems in council
JPMorgan Chase will pay a fine of $ 250 million for poor risk management practices and conflicts of interest in its advisory business, the Office of the Comptroller of the Currency said on Tuesday.
The company with $ 3.2 trillion in assets had warned at the beginning of November that it may have to pay a penalty for deficiencies in internal controls and internal audit related to certain consulting and other activities.
Indeed, “the OCC found that the bank’s risk management practices were deficient and that it lacked a sufficient framework to avoid conflicts of interest,” the agency said in a press release announcing the civil pecuniary penalty.
However, JPMorgan has not admitted guilt in the case, the OCC said in a seven-page order detailing the agency’s findings.
This is JPMorgan’s second major fine this fall: In September, the company agreed to pay the Commodity Futures Trading Commission and other agencies $ 920 million for manipulating the precious metals and securities markets. of the Treasury.
JPMorgan’s fiduciary business provides a range of strategies and investment vehicles to clients managing $ 29.1 trillion in assets. The OCC found that for “several years” JPMorgan had a “weak” management and control program for this line of business and an “insufficient” audit program to detect any problems.
According to the OCC, conflicts of interest arise “whenever a bank engages in self-operation operations and in any situation where a bank’s ability to act in the best interests of its beneficiaries. accounts or its customers is compromised. This can happen when banks refer investors to their own brokers or funds.
There was no evidence provided in the OCC documents that a client suffered financial harm, and there is no requirement in the order for JPMorgan to change the way the company manages assets. for the customers. JPMorgan corrected the flaws that led to the fine, according to the order.
“We are committed to providing best-in-class controls across our business, and we have made significant investments and improved our controls platform over the past few years to address identified issues,” said a spokesperson. word of JPMorgan.
Banks are rushed to settle federal inquiries before President-elect Joe Biden takes office, as he is expected to put in place a stricter regulatory framework.
The fine announced on Tuesday will go to the US Treasury, the OCC said.