The US Securities and Exchange Commission has censured JPMorgan Chase Bank and J.P. Morgan Securities over a restricted employee’s swap activities before permission was granted. The employee directly carried out 100 transactions and supervised traders handling at least 700 more. JPMorgan consented without admitting the findings; the regulator credited self-reporting and corrective measures.
The US Securities and Exchange Commission (SEC), the country’s securities regulator, has censured JPMorgan Chase Bank and J.P. Morgan Securities over a restricted employee’s involvement in security-based swaps. The settlement order dated 2 October also directs both units to cease the relevant violations. The units consented without admitting the SEC’s findings.[1], [2]
The employee, based in the United Kingdom, had been associated with J.P. Morgan Securities since 2010. A 2011 finding by the UK Financial Services Authority over his failure to report suspected customer insider trading created a statutory disqualification under US rules. JPMorgan identified the restriction before its swap-dealer registration and told him not to handle swaps with US counterparties without permission, but did not follow up to check compliance.[1]
The SEC found that the employee directly executed 100 transactions between December 2021 and January 2024. He also supervised traders carrying out at least 700 transactions between November 2021 and March 2024. Permission was granted on 1 March 2024.[1]
JPMorgan reported the earlier transactions to the SEC on 24 June 2024. In August, it adopted procedures requiring a supervision plan, system controls and monthly trade review. The SEC took self-reporting and remediation into account in accepting the settlement.[1]
