Courtesy of Pam Martens
Gary Gensler, SEC Chairman
JPMorgan Chase is the largest bank in the United States. It also has the scandalous distinction of having admitted to five criminal felony counts brought by the U.S. Department of Justice since 2014 and a breathtaking series of additional charges from other regulators. (See its Rap Sheet here.)
On Friday, the Securities and Exchange Commission fined the securities unit of JPMorgan Chase $125 million for evading the ability of the SEC to adequately conduct its investigations of the bank because there was “firmwide” use by traders, supervisors and other personnel of non-official communications devices to conduct its business, while the firm failed to record and retain these messages as required by law.
These new violations occurred despite similar conduct during the bank’s participation in the rigging of the foreign exchange market, which brought a criminal felony charge against the bank by the Justice Department in May of 2015. In that case, conspiring banks including JPMorgan Chase used Bloomberg electronic chat rooms, which they referred to as “The Cartel” or “The Mafia.” JPMorgan Chase admitted to the felony charge and received a Deferred Prosecution Agreement. It was also put on probation and required to cease and desist from further lawbreaking. But just last September 29, the Justice Department brought two more felony counts against the bank for rigging the precious metals and U.S. Treasury markets. It was again handed a Deferred Prosecution Agreement and put on probation. It now appears that the Justice Department may have been denied access to the full scale of the wrongdoing since the bank is now admitting some messages on personal devices were destroyed.
The SEC described the new violations as follows:
“…JPMS [J.P. Morgan Securities LLC] admitted that from at least January 2018 through November 2020, its employees often communicated about securities business matters on their personal devices, using text messages, WhatsApp, and personal email accounts. None of these records were preserved by the firm as required by the federal securities laws. JPMS further admitted that these failures were firm-wide and that practices were not hidden within the firm. Indeed, supervisors, including managing directors and other senior supervisors – the very people responsible for implementing and ensuring compliance with JPMS’s policies and procedures – used their personal devices to communicate about the firm’s securities business.
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