JPMorgan Chase Hit with $348 Million in Penalties for Inadequate Monitoring Practices

JPMorgan Chase Hit with $348 Million in Penalties for Inadequate Monitoring Practices

The Federal Reserve is forcing a financial services giant to pay a giant fine because they field to monitor trading activity for a period of roughly a decade. JPMorgan Chase, like other financial institutions, is required to track transactions and report data to surveillance platforms designed to stop illegal activity such as money laundering. 

The $250 million fine imposed by the Office of the Comptroller of the Currency comes on top of a $98 million penalty assessed by the Fed’s Board of Governors in a related matter. Along with the monetary sanctions, JPMorgan Chase is also required to take steps in order to alleviate the problem, such as allowing an independent third party to assess its trade surveillance program. 

According to the OCC, the financial institution did not account for billions of instances of trading activity between 2014 and 2023. These might include messages between traders and clients involving actual or proposed transactions. With a wide array of apps that allow communications to be encrypted or undiscoverable, regulatory concern about problematic activity slipping through the cracks is increasing. Other institutions, such as Wells Fargo and BNP Paribas, have been heavily sanctioned for employing private messaging apps.

Regulation within the financial services industry focuses on maintaining a balance between privacy and the transparency required to stop illegal schemes and maintain accountability for wrongdoers. The use of WhatsApp and other private messaging services could be a sign that a bank, investment firm or hedge fund is seeking to avoid making communications available to authorities as required by law. Another possible tip-off is the use of a personal device or email address when discussing a financial matter. 

Even if you don’t have a detailed understanding of sophisticated financial transactions, you might be able to sense that something isn’t on the up-and-up when a co-worker or the financial professional serving you requests to communicate using a specific private messaging app. Likewise, an email address or phone number not associated with the financial institution itself could be a sign of trouble. 

Regulatory authorities in the financial sector, such as the Federal Reserve and Securities and Exchange Commission take surveillance issues very seriously. Identifying improper conduct as a whistleblower could result in a substantial reward if you identify a financial institution that is breaking the rules in the way that JPMorgan Chase was. If you believe you’ve discovered some type of financial services misconduct, Kardell Law Group can apprise you of your legal options.