JPMorgan fined $1.8M for client bond trades misconduct

by Chanyaporn Chanjaroen

Singapore fined JPMorgan Chase & Co. S$2.4 million ($1.8 million) for failing to prevent and detect misconduct by its relationship managers over client bond trades. 

The bankers had made inaccurate or incomplete disclosures to private banking clients in 24 over-the-counter bond transactions between Nov. 2018 and Sept. 2019, according to a statement by the Monetary Authority of Singapore on Monday. This resulted in the customers being charged spreads that were above bilaterally agreed rates, the regulator said. 

The MAS said its investigations found that the US bank’s practice for OTC bond trades was to charge clients a spread over the interbank prices, which were not available to clients. Customers had to rely on what the relationship managers conveyed to them about the interbank prices and spreads, according to the statement. 

In the 24 transactions, the bankers breached local laws by either misrepresenting the price components or omitted material information that the spreads charged were above agreed rates, MAS said. JPMorgan paid the penalty after admitting liability, and has refunded the overcharged fees to affected clients, according to the MAS statement.   

JPMorgan said its private bank undertook a comprehensive update to its internal controls, monitoring and training framework in 2020 after completing an internal review that was part of an industry-wide inspection, according to an e-mailed statement by the bank. The affected clients represent a very small portion of the total trades processed during the related period, JPMorgan said. .

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