The Office of the Comptroller of the Currency has terminated a 2-year-old enforcement action against JPMorgan Chase that, in combination with a Federal Reserve order, cost the bank nearly $350 million.
The OCC in March 2024 asserted JPMorgan failed to adequately monitor client trading activities for market misconduct between 2014 and 2023.
The bank “operated with gaps in trading venue coverage and without adequate data controls required to maintain an effective trade surveillance program,” the OCC said at the time.
JPMorgan “failed to surveil billions of instances of trading activity on at least 30 global trading venues,” the OCC alleged. “These gaps and deficiencies … constitute unsafe or unsound banking practices.”
In an order signed March 30 and made public Thursday, the OCC said it “believes that the safety and soundness of the Bank and its compliance with laws and regulations does not require the continued existence of the Order.”
The order did not give details into the OCC’s reasoning. JPMorgan didn’t provide an immediate comment.
There was no indication Friday that the companion Fed order against JPMorgan had been terminated.
The OCC’s March 2024 order required JPMorgan to correct the deficiencies, seek the agency’s non-objection before onboarding new trading venues, and enlist an independent third party to conduct an assessment of the bank’s trade surveillance program.
The bank, a month earlier, disclosed that certain trading and order data from its corporate and investment bank division was not correctly feeding into its trade surveillance platforms as required.
“The Firm has completed enhancements to the CIB’s venue inventory and data completeness controls, and other remediation is underway,” JPMorgan said in a February 2024 filing. “The Firm has also performed a review of the data not originally surveilled, which is nearly complete, and has not identified any employee misconduct, harm to clients or the market.”
JPMorgan disclosed in November 2023 that it was cooperating with investigations into whether the bank had fully complied with requirements to provide comprehensive trading and order data. JPMorgan acknowledged that certain regulatory authorities had proposed monetary penalties, and the bank said it expected to pay two regulators and was in advanced talks with a third.
JPMorgan was ordered to pay $250 million in penalties to the OCC and another $98.2 million to the Fed.
