JPMorgan Chase Ordered to Pay $100 Million for CFTC Trade Reporting Violations

By Jace Dela Cruz

May 25, 2024 01:33 AM EDT

NY Attorney General Files Lawsuit Against JP Morgan Chase Over Bear Stearns Fraud — NEW YORK, NY - OCTOBER 02: People pass a sign for JPMorgan Chase & Co. at it's headquarters in Manhattan on October 2, 2012 in New York City. New York Attorney General Eric Schneiderman has filed a civil lawsuit against JPMorgan Chase alleging widespread fraud in the way that mortgages were packaged and sold to investors in the days that lead-up to the financial crisis.
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JPMorgan Chase & Co has been ordered to pay $100 million and admit to violating US Commodity Futures Trading Commission (CFTC) rules related to trade reporting lapses, according to a report by Reuters.

CFTC Orders JPMorgan to Pay $100 Million, Admit to Violating Rules

In June 2021, the bank identified and reported gaps in its trading data and order surveillance, with some issues dating back to 2013.

According to the commission's order, these gaps resulted in violations of the CFTC's trade data reporting regulations for registered entities.

A JPMorgan spokesperson did not provide an official comment following the order but referred to earlier statements that the bank had self-reported the violations and determined no misconduct or harm to customers.

Commissioner Kristin Johnson emphasized the importance of acknowledging mistakes, misconduct, or compliance failures in enforcement actions.

She noted that these matters are often resolved without such acknowledgments, and this settlement with JPMorgan is a move towards addressing that issue.

JP Morgan Faces $200 Million Civil Monetary Penalty

The order mandates JP Morgan to pay a $200 million civil monetary penalty, stop violating CFTC supervision requirements, and adhere to specified conditions.

The penalty will be reduced by $100 million if payments are made under resolutions with the Office of the Comptroller of the In the process of integrating a new trading exchange in 2021, JP Morgan encountered an issue with its trade surveillance.

The CFTC discovered that the surveillance of trading on multiple venues and trading systems was not functioning properly, leading to gaps in the trade surveillance.

According to the CFTC, the surveillance gaps occurred because JP Morgan did not properly set up certain data feeds, which led to incomplete trade and order data being missed by their surveillance tools.

JPMorgan has stated that the surveillance gaps were completely resolved by 2023. Currency and the Federal Reserve Board, dated March 14 and March 8, 2024, respectively.