JP Morgan Fined for Trading Platform Surveillance Gaps

JP Morgan has been fined $348.2 million by two US regulators for gaps in its surveillance programme that monitors activity on trading platforms, although neither cites instances of direct customer harm or actual misconduct.

The Office of the Comptroller of Currency (OCC) has fined the bank $250 million, with the balance being levied by the Federal Reserve. The OCC says in its filing that since 2019 the bank has failed to provide adequate governance over its activities on 30 trading platforms, and operated with deficiencies in its trade surveillance programme that meant “billions of instances of trading activity” were not properly supervised. The Federal Reserve charges match those of the OCC, but incorporate a longer time horizon – from 2014 to 2023.

Under the terms of the agreement to settle the matter – which the bank says was self-reported – JP Morgan must gain prior permission from both the OCC and Federal Reserve before onboarding additional trading venues. Requests must be submitted at least 30 days before the proposed onboarding and contain details of how JP Morgan will operate on the venue how it will surveil activity.

As is standard in these cases, the bank will review its trading activities and provide a written report to the authorities, it will also retain an independent third-party to assess the effectiveness of its trade surveillance programme.