The Office of the Comptroller of the Currency (OCC) today announced a $250 million civil money penalty against JPMorgan Chase Bank, NA (JPMC) related to deficiencies in its trade oversight program.
The OCC found that JPMC operated with gaps in its trading venue coverage and without adequate data controls needed to maintain an effective trade oversight program.
Generally, trading venues are systems or electronic platforms, operated by investment firms or market operators, that bring together multiple third-party buying or selling interests in financial instruments to execute a transaction. The OCC expects banks to exercise trade supervision to monitor the market behavior of its traders and customers as part of its market behavior risk control framework.
The OCC found that JPMC failed to track billions of instances of trading activity across at least 30 global trading venues. These gaps and deficiencies in JPMC’s trade supervision program constitute unsafe or improper banking practices.
The OCC also issued a cease and desist order requiring JPMC to take broad and comprehensive corrective actions to improve its trade oversight program. The order requires the bank to correct the deficiencies, seek OCC no-objection before establishing new trading venues, and obtain an independent third party to conduct a trade oversight program evaluation.
The OCC’s enforcement actions are separate from, but coordinated with, the Board of Governors of the Federal Reserve System, which today announced related enforcement action against JPMorgan Chase & Co.
The OCC fine was paid to the US Treasury.