Financial giant JPMorgan Chase was hit with $200 million in fines for federal record-keeping violations. According to a press release by the U.S. Securities and Exchange Commission (SEC), the firm was accused of “widespread and longstanding failures” regarding preserving written communications.
The national securities and investment fraud law firm Levin Law, P.A. (“Levin Law”) is investigating claims of fraud or misconduct related to JPMorgan and other financial institutions. If you suffered financial losses as a result of investing through a broker-dealer, contact Levin Law founder and managing attorney Brian Levin at (305) 402-9050 or email firstname.lastname@example.org for a free case evaluation.
On December 17, 2021, the SEC announced charges against J.P. Morgan Securities LLC (JPMS), a JPMorgan Chase & Co subsidiary. The federal charges stemmed from an investigation into the firm’s record-keeping procedures.
As noted in the administrative order, the regulator found that employees of JPMorgan failed to adhere to record keeping requirements, regularly communicating through unapproved third-party apps like WhatsApp and on personal devices. The written communications were not properly maintained or preserved in accordance with federal law.
The failures, according to the SEC, were widespread, involving “employees at all levels of authority.” The use of personal devices and third-party apps for business purposes was against the written policies and procedures of the broker-dealer and was not corrected once discovered.
In a rare move, JPMorgan admitted to the misconduct agreeing to a $125 million penalty by the SEC. In addition, as reported by The Washington Post, the bank agreed to a $75 million fine to close a parallel investigation by the Commodity Futures Trading Commission. The Commission alleged that bank representatives engaged in “unauthorized communication methods” even among management.
Regulators ultimately found that JPMorgan was in violation for failing to adequately supervise its employees and preserve communications for at least three years. Representatives used non-approved modes of communication to conduct business in violation of the company’s policies and federal rules. In an effort to crack down on such abuses, the SEC has said that they will now require admissions of wrongdoing in certain cases. As noted by the Post, the fine was the largest imposed for records violations.
Record-keeping requirements are critical to protect investors, according to the SEC. A firm’s failure to comply with the regulations puts clients at risk for fraud and disallows agencies from ensuring the absence of wrongdoing.
The constant evolution of technology and new modes of communication requires further due diligence by broker-dealers to ensure that their representatives are complying with record-keeping requirements. Failure to ensure compliance may result in liability and violation of federal securities law requiring adequate supervision and implementation of written policies and procedures.
If you have suffered losses related to a federal securities law violation or a broker-dealer’s failure to supervise, contact Levin Law, P.A. for a free case evaluation. Attorney Brian Levin has helped to recover millions of dollars on behalf of aggrieved investors throughout the United States.
Call (305) 402-9050 or email email@example.com to speak directly with attorney Levin. Most cases are accepted on a contingency fee basis, meaning that clients are not obligated to pay Levin Law’s attorney fees unless money is recovered on their behalf.
Levin Law is a premier national cryptocurrency, securities, commodities, futures, and class action law firm. Brian Levin, Levin Law’s founding attorney, has helped recover in excess of $150,000,000 through arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.