Regulators hit JPMorgan Chase with $200 million in fines for violating federal record-keeping laws, including looking the other way while employees conducted business over WhatsApp and personal devices.
The Securities and Exchange Commission announced a record $125 million settlement on Friday, citing “longstanding failures” by JPMorgan’s securities arm to keep an archive of employee communications. The bank also will pay a $75 million penalty to resolve a parallel investigation by the Commodity Futures Trading Commission, which concluded that “unauthorized communication methods” had been in widespread use since at least 2015, including among managing directors and senior supervisors.
The agencies also extracted a rare admission of wrongdoing from the New York-based bank, which has a market cap of $463.3 billion.
By law, financial firms are required to preserve electronic records between brokers and clients so that they can be scrutinized by regulators and guard against fraud and antitrust violations. But in the age of remote-everything, some of Wall Street’s professional class has conducted business beyond the reach of company phone lines and messaging systems, with many migrating to platforms such as WeChat, Signal and Telegram. JPMorgan’s own policies prohibited use of such apps for business purposes, but enforcement was minimal.
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