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Summary
- JPMorgan is facing another fine within a span of 2 months.
- The authorities found risk management practices were "deficient”, whereas no update on any financial troubles to its clients is made.
Multinational investment bank and financial services firm JPMorgan Chase & Co agreed on Tuesday to pay a US$250 million fine. One of the US regulators found a "pattern of misconduct" for risk management and other control failings in its wealth and asset management business. This comes as a second massive penalty for the bank in less than two months.
The Office of the Comptroller of the Currency said in the media release that it found that the New York-based bank's risk management practices were "deficient”.
The bank has accepted to pay the fine as it lacked satisfactory controls and is left with no option to avoid the conflicts of interest in its business.
The consent order said that for many years the bank continued with weak control framework and management for fiduciary activities. OCC said that JPMorgan has a faulty audit program along with inadequate internal controls over those ventures. However, the bank has not yet confirmed or dismissed the accusations publicly but agreed to pay the fine. The bank has also fixed the deficiencies which resulted in the penalty.
Notably, there is no mention that the bank's actions have brought upon any financial impairment to its clients. A spokesperson for the bank said that they are focused on delivering best-in-class instruments for all its activities. JPMorgan has invested in the operations and strengthened its control platforms for the last many years to cater to the weaknesses.
It is the second time in the last two months that the bank had to pay such a chunky fine to the US regulators. The previous settlement was also on similar lines showcasing issues on how it administers business. In the month of September, the bank paid US$920 million to compensate for an investigation from three federal agencies, which were looking into JPMorgan's role as it was accused of manipulating global markets for metals and US Treasurys.
However, both JPMorgan and the U.S regulators did not release a lot of details about the possible wrongdoings and the reasons which resulted in the fine.
Good Read: JPMorgan pays $920 Million to settle the US Justice Department and CFTC Probe
Previous penalties on JPMorgan:
Back in 2015, JPMorgan had agreed to pay more than US$300 million in penalties. That time, the Securities and Exchange Commission became aware of the bank's actions on failing to release information that few of its clients had been put into higher-fee products designed by the firm.
JPMorgan has one of the world's most extensive and most intensive asset and wealth management businesses. The OCC said that the bank has US$1.3 trillion in fiduciary assets and a mountainous US$27.8 trillion of non-fiduciary custody assets. JPMorgan is also commonly known in the investment space as it offers a varied range of investment strategies to its fiduciary clients via a broad range of investment options.
Also Read: IRI Renews and Extends Software Licence Agreement with JP Morgan Chase
