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Thursday, January 20, 2022

JPMorgan was fined $ 125 million for using face-to-face chats to conduct business.

On Friday, the regulator fined JPMorgan Chase $ 125 million for not tracking official correspondence on personal cell phones and employee emails.
Employees of the bank’s securities department avoided oversight by discussing the company’s business on their personal devices via text messages, WhatsApp messaging and personal email accounts, the Securities and Exchange Commission said in a statement. According to the SEC, the bank’s “widespread and long-standing bankruptcies” spanned the period from January 2018 to November 2020.

JPMorgan has admitted that its behavior violates federal securities laws, which are designed to protect investors and maintain fair markets. He also agreed to hire a compliance consultant to review his email retention policies and procedures.

Record-keeping is “integral to the integrity of the market and a fundamental component of the SEC’s ability to be an effective cop at the beat,” SEC Chairman Gary Gensler said in a statement. “As technology changes, it is even more important that registrants ensure that their messages are properly recorded and not carried out outside of official channels.”

A bank spokesman declined to comment.

JPMorgan’s fine is the largest in record keeping since 2006, when Morgan Stanley was fined $ 15 million for failing to send emails during investigations of initial public offerings and research by analysts.

The Securities and Exchange Commission has yet to complete its investigation into JPMorgan, which found that more than 100 people, including senior executives, used private messages to send tens of thousands of messages that were not properly stored on the bank’s systems. according to the SEC spokesman informed about him. the question of who declined to be named is debated by a still-unsolved investigation. According to the source, the messages covered a wide range of topics, from investment strategy to meetings with clients, and involved various teams, including divisions of an investment bank.

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The regulator only learned of unauthorized communications through third parties, including in one case when it was investigating JPMorgan’s role as an underwriter, the SEC said in a writ of execution. Employees, including department heads, managing directors and other senior executives, sent over 21,000 text messages and emails related to working for an investment bank client from January 2018 to November 2019. According to the order, the bank did not keep records of these messages.

The JPMorgan investigation also prompted an investigation into the reports of other financial companies, the regulator said on Friday. This prompted companies to report any such concerns. This is because firms that voluntarily report violations to authorities usually face less severe penalties.

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