JPMorgan Chase will pay $4 million to settle allegations the bank mistakenly and permanently deleted 47 million electronic records from early 2018, pertaining to its retail-banking unit, the Securities and Exchange Commission said Thursday.
“Because the deleted records are unrecoverable, it is unknown — and unknowable — how the lost records may have affected the regulatory investigations,” the SEC said in Thursday’s settlement order.
The SEC sought some of the deleted emails and instant messages as part of eight investigations and four regulatory probes, the agency said. Many of the communications were business records the bank was required to keep for three years.
The communications, spanning from Jan. 1 to April 23, 2018, were deleted in June 2019 by an outside vendor responsible for archiving bank records, according to the order.
JPMorgan's corporate compliance technology department had been trying unsuccessfully to delete some communications from the 1970s and 1980s, according to Reuters.
The vendor failed to properly apply a three-year retention setting to emails sent to the “Chase” communications domain in early 2018, the SEC said. Those records were wiped, including the email inboxes of as many as 7,500 employees who had regular contact with Chase customers.
"The troubleshooting exercise permanently deleted all of the emails in that domain from that period which were not subject to legal holds," the agency said in its order.
The bank did not admit or deny wrongdoing but said, in a statement to Reuters, "JPMorgan takes its record-keeping obligations seriously.”
JPMorgan has a spotty track record with regard to holding onto communications. The bank in December 2021 agreed to pay $125 million to the SEC and another $75 million to the Commodity Futures Trading Commission for failing to maintain and preserve business communications by employees using unofficial communications channels, such as WhatsApp, between 2018 and 2020.
The SEC and CFTC penalized 11 more Wall Street banks last year over similar transgressions.
JPMorgan has adopted its own email coding procedures to prevent another mishap like the one penalized Thursday, Reuters reported.