The SEC Fines JP Morgan Securities for Regulatory Failures in Connection with Business Communications
The U.S. Securities and Exchange Commission on December 17 has reportedly fined J.P. Morgan Securities $125 million for “widespread” failures to keep staff communications on personal mobile devices, messaging apps and emails, and is investigating similar lapses at other firms.
JP Morgan reportedly admitted to the charges and to violating securities laws, according to the SEC order. The firm also plans to implement certain improvements to compliance policies, in addition to the fine, according to the SEC.
The SEC said it discovered the firm had been violating rules that require firms to preserve written business communications when the broker was unable to produce records during the course of other investigations.
The regulator has apparently opened other investigations into firms’ record- keeping practices as a result of JP Morgan’s alleged rules violations, according to Reuters.
According to the complaint, between January 2018 through November 2020, JPMorgan’s employees often communicated about securities business matters on their mobile devices, using text messages, WhatsApp, and personal email accounts, without preserving the records. The misconduct was reportedly known to senior management, who also used personal devices to discuss business matters, according to the regulator.
J.P. Morgan Securities has agreed to retain a compliance consultant and conduct a comprehensive review of its policies and procedures relating to the retention of electronic communications found on personal devices, among other remedies.
The penalty is reportedly one of the first major enforcement actions brought under SEC Chair Gary Gensler, who has pledged to crack down on misconduct by Wall Street companies, according to Reuters.
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This is not the first time that JP Morgan Securities has been in trouble with regulators. To learn more, please see:
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