JPMorgan to pay more than $300M in settlement over wealth management conflicts

JPMorgan to pay more than $300M in settlement over wealth management conflicts
Allegations include that the bank didn't disclose its preference for putting clients' money into its own investment products.
JAN 06, 2016
JPMorgan Chase & Co. will pay more than $300 million to settle U.S. allegations that it didn't disclose its preference for putting clients' money into the bank's own investment products. America's largest bank by assets admitted that two of its wealth-management subsidiaries — its securities subsidiary and its nationally chartered bank — failed to tell customers it preferred JPMorgan-managed mutual funds and hedge funds from 2008 to 2013, according to the Securities and Exchange Commission. The SEC announced $267 million in penalties and disgorgements against JPMorgan. The bank agreed to pay an additional $40 million as part of a parallel action by the U.S. Commodity Futures Trading Commission. (Related: 10 other huge regulatory fines in the advice industry) “Firms have an obligation to communicate all conflicts so a client can fairly judge the investment advice they are receiving,” Andrew J. Ceresney, director of the SEC Enforcement Division, said in a statement. “These J.P. Morgan subsidiaries failed to disclose that they preferred to invest client money in firm-managed mutual funds and hedge funds, and clients were denied all the facts to determine why investment decisions were being made by their investment advisers.” The disclosure weaknesses cited in the settlements “were not intentional and we regret them,” said Darin Oduyoye, a JPMorgan spokesman. “We have always strived for full transparency in client communications, and in the last two years have further enhanced our disclosures in support of that goal.” (Ex-SEC inspector general David Kotz on advice industry regulation's future)

Latest News

Ex-Texas advisor gets 11 years for Ponzi scheme, Travis Kelce among victims
Ex-Texas advisor gets 11 years for Ponzi scheme, Travis Kelce among victims

Siddharth Jawahar was sentenced 11 years in prison and $31M in restitution for running Swiftarc Capital fraud scheme

HSBC, Citi unveil new high-life and luxury offerings for affluent clients, family offices
HSBC, Citi unveil new high-life and luxury offerings for affluent clients, family offices

Wall Street banks expand wealth services as ultra-high-net-worth client demands extend further above and beyond investment management.

Cerity Partners enters Iowa with Gilbert & Cook deal
Cerity Partners enters Iowa with Gilbert & Cook deal

The acquisition of $2 billion Gilbert & Cook extends a buying spree for the ultra-high-net-worth firm that has already touched six states this year.

The financial industry has a saving problem
The financial industry has a saving problem

After years of encouraging sacrifice and delayed gratification, advisors have to do the next emotional lift: helping clients let go of a potentially harmful scarcity mindset.

Investment accounts fund nearly 7% of US household spending, JPMorgan finds
Investment accounts fund nearly 7% of US household spending, JPMorgan finds

A new JPMorganChase Institute report reveals how deeply stock market wealth now drives everyday American spending, especially for retirees.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income