JPMorgan Chase agreed to pay a $250 million civil money penalty for its failure to maintain adequate internal controls and internal audit over its advisory business, the Office of the Comptroller of the Currency (OCC) announced Tuesday.
The bank for years "maintained a weak management and control framework for its fiduciary activities and had an insufficient audit program for, and inadequate internal controls over, those activities," the OCC said. The bank also had deficient risk management practices and an insufficient framework for avoiding conflicts of interest, the agency said.
- The country's largest bank warned investors this month in a 10-Q filing it was facing a potential fine connected to "historical deficiencies in internal controls and internal audit" in wealth management and other areas.
JPMorgan Chase neither admitted nor denied it was at fault and has fixed the deficiencies that led to the penalty, the OCC said. The order did not provide examples of harm caused to clients.
"We are committed to delivering best-in-class controls across our business, and we have invested significantly in and enhanced our controls platform over the last several years to address the issues identified," JPMorgan Chase spokesperson Darin Oduyoye said in a statement.
JPMorgan's fine follows a September penalty of $920.2 million levied by the Justice Department, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over allegations the bank manipulated the precious metals and Treasury markets over eight years. The penalty marked a record high for a bank caught spoofing.
Tuesday's fine comes amid a surge of settlements some banks may be looking to secure before the Biden administration takes office Jan. 20.
"There are a handful of financial institutions, in my view, that may try to settle with an outgoing Trump administration rather than face what could be a more aggressive Biden enforcement regime," Elliott Stein, an analyst at Bloomberg Intelligence, told the wire service this month.
Other recent penalties levied against banks include a $2.9 billion fine Goldman Sachs paid to the Justice Department and regulators in the U.K., Singapore and Hong Kong over its decade-long 1MDB bribery scandal. The investment bank is also clawing back $174 million in compensation from current and former executives connected to the scandal.
Scotiabank agreed in August to pay $127.4 million to resolve its own spoofing charges. And TD settled with the Consumer Financial Protection Bureau (CFPB) over "deceptive" overdraft enrollment practices in an agreement that will cost the Toronto-based lender $97 million in restitution and a $25 million fine.
The OCC also fined Citi $400 million last month over persistent issues in risk management, data governance and internal controls, and reserved the right to require the bank to make changes to senior management and board if the regulator deems it is moving too slowly.