According to MAS, the relationship managers provided inaccurate or incomplete information to clients in 24 instances involving over-the-counter bond transactions. In these cases, clients were charged spreads exceeding the pre-agreed rates.
MAS stated that JPMorgan lacked sufficient processes and controls to ensure its relationship managers adhered to agreed terms with clients. These deficiencies in oversight allowed the misconduct to occur. Following its investigation, the central bank confirmed that JPMorgan admitted liability for its oversight failures and paid the civil penalty in full.
As part of its response, the bank refunded the affected clients for the overcharged fees and implemented enhancements to its pricing frameworks and internal control mechanisms to prevent similar incidents in the future. MAS emphasized that it is also examining the actions of the individual relationship managers involved in the misconduct, signalling possible further actions at the individual level.
In a separate statement, JPMorgan Chase expressed satisfaction that the matter had been resolved and underscored that the affected transactions constituted a small portion of its overall trading activity during the relevant period. The bank highlighted that, as of 2020, it had completed a comprehensive review of its internal controls and updated its monitoring, pricing transparency, and compliance frameworks. These measures, JPMorgan noted, were designed to strengthen its governance processes and align with regulatory expectations.
MAS continues to scrutinize financial institutions for lapses in governance and transparency, particularly in areas where customer trust and fair dealing are at stake. This case underscores the regulatory focus on holding institutions accountable for maintaining robust internal controls.
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