JPMorgan Chase & Co (NYSE:JPM) has been fined S$2.4 million ($1.8 million) by the Monetary Authority of Singapore (MAS) for failing to prevent and detect misconduct by its relationship managers (RMs).
In 24 over-the-counter (OTC) bond transactions between November 2018 and September 2019, the RMs provided clients with inaccurate or incomplete disclosures, resulting in spreads exceeding agreed rates.
Investigations found that JPM's practice was to charge clients a spread over the interbank prices for OTC bond transactions. As the interbank prices were not available to clients, they had to rely on the RMs' representations regarding the interbank prices and spreads.
The bank failed to establish adequate controls to ensure adherence to pre-agreed spreads, leading to misrepresentation or omission of key pricing details in violation of sections 201(c) and 201(d) of the Securities and Futures Act (SFA).
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JPMorgan admitted liability under section 236C of the SFA, paid the MAS penalty, refunded overcharged fees to affected clients, and strengthened its pricing frameworks and internal controls. The bank is also conducting ongoing reviews of the RMs involved in the misconduct.
Price Action: JPM shares closed lower by 0.03% at $249.72 on Friday.
Photo: Courtesy of Satur via Shutterstock
