JPMorgan Chase & Co. has been fined $4 million by the Securities and Exchange Commission (SEC) for erroneously deleting 47 million emails, Bloomberg reported.
SEC alleges JPMorgan subsidiary deleted 47 million emails, some related to subpoenas
This action has resulted in the unavailability of crucial communications for regulators in multiple investigations, as alleged by the SEC. From January 2018 to April 2018, JPMorgan Securities permanently deleted approximately 47 million electronic records, leading to the inability of the bank to provide requested documents for eight SEC investigations and four other regulatory probes. The SEC did not disclose whether these investigations were specifically directed at the bank, according to the report.
“Because the deleted records are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations,” the SEC said in a settlement order. JPMorgan chose not to provide a comment regarding the allegations made by the regulator and did not acknowledge or dispute them.
In 2021, the bank resolved accusations of violating regulations by failing to retain business communications on platforms such as WhatsApp, paying $125 million to the SEC and $75 million to the Commodity Futures Trading Commission. Subsequently, other banks would also face penalties for engaging in similar conduct in the following year.
According to the SEC, brokerages like JPMorgan Securities are obligated to retain records of their business communications for a minimum of three years.
In the recent settlement announced on Thursday, the SEC claimed that the firm unintentionally deleted a significant number of communications from the first quarter of 2018 while attempting to resolve technical issues. The SEC also stated that the vendor responsible for archiving the bank’s records had assured JPMorgan that the records would be safeguarded.
However, the regulator alleged that the vendor failed to protect the emails sent to the “Chase” communications domain, resulting in the deletion of those specific records. This deletion encompassed the email inboxes of approximately 7,500 employees who regularly engaged with Chase customers.
Email deletion led to a violation of federal securities law
A significant portion of the emails consisted of “business records required to be retained pursuant” to federal securities law, as stated in the order.
J.P. Morgan Securities agreed to the SEC’s penalty and, in addition, received a censure from the regulatory body, CNBC reported. These messages encompassed various types of communications, such as older emails, instant messages, and exchanges conducted through the Bloomberg terminal service.
But there were “glitches” in the project, “with the identified documents not, in fact, being expunged,” the order said.
Comments