US SEC and CFTC Fines JPMorgan $200 Million for Letting Evade Regulators’ Reach

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Published: Dec 17, 2021, 20:55 UTC

JPMorgan has been fined $200 million for letting its employees use private messaging platforms like WhatsApp to contact clients.

JPMorgan Charged $200 Million by the SEC and CFTC

Leading financial institution JPMorgan Chase is set to cough out $200 million in fines to two United States regulators. The bank was accused of letting its employees use WhatsApp and other platforms to evade federal record-keeping laws.

According to the United States Securities and Exchange Commission earlier today, JPMorgan had agreed to pay $125 million after admitting to “widespread” record-keeping failures over the past few years. Furthermore, the Commodity Futures Trading Commission said it had fined the bank $75 million for allowing unapproved communications since at least 2015.

The SEC officials said JPMorgan’s failure to preserve the offline conversations is a violation of federal securities law as it left the regulatory agency unaware of what was happening between the bank and its clients.

According to federal laws, financial institutions are required to keep an electronic record of the conversations between the clients and the financial institutions to ensure that the firms are not breaking the law.

The SEC said employees were guilty of using WhatsApp and other private communication methods to get in touch with the clients.

The SEC is Looking at Other Major Financial Institutions

The investigation into JPMorgan is still ongoing, but the regulatory agency said it is also looking into other major financial institutions. The regulatory agency is looking into the activities of major banks, including Morgan Stanley, Deutsche Bank and a few others.

The shares of JPMorgan have dipped by more than 2% since the SEC and CFTC made their announcements. At press time, JPM is trading at $156 per coin, down by 2.16% since the market opened earlier today.

JPM has underperformed in recent months, losing more than 5% of its value over the past four weeks. However, year-to-date, JPM has performed excellently, adding 26% to its value during that period.