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

Wealth Enhancement adds $592M Chicago-area RIA
Wealth Enhancement adds $592M Chicago-area RIA

The mega-RIA with roughly $160 billion in client assets remains firmly in acquisition mode amid rumors of private equity giants vying to scoop it up.

Annuity sales hit a record as war and Fed jitters redraw fixed income
Annuity sales hit a record as war and Fed jitters redraw fixed income

Record annuity demand for principal protection collides with the most hawkish Fed dissent since 2016.

Allworth deepens tax-advisory push with $1.1B Sachetta acquisition
Allworth deepens tax-advisory push with $1.1B Sachetta acquisition

The PE-backed RIA makes its first major move since bringing in a new capital partner, adding a Massachusetts advisory firm alongside a second East Coast RIA

Hightower Signature Wealth grows by $2.5 billion with Stearns deal
Hightower Signature Wealth grows by $2.5 billion with Stearns deal

Stearns Financial Group's addition brings 30 advisors and three decades of North Carolina planning experience to the platform.

Edward Jones backs senior protection rules after $3 million account freeze
Edward Jones backs senior protection rules after $3 million account freeze

An 86-year-old from Dallas tried to withdraw funds from his account, but Edward Jones invoked a FINRA-backed temporary lockout before he eventually left for Merrill Lynch.

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