Another day, another multi-million dollar JPMorgan settlement for criminal conduct. On Thursday, the Securities and Exchange Commission (SEC) announced that two JPMorgan wealth management subsidiaries agreed to pay $267 million and admit wrongdoing for failing to disclose that they had conflicts of interest when advising clients.
While posing as objective advisory services, J.P. Morgan Securities LLC and JPMorgan Chase Bank had an undisclosed program to steer clients into JPMorgan financial products whether or not it was in the client’s best interest. Clients were not told that JPMorgan investment advisors had such an incentive and had a conflict of interest in giving clients sound financial advice.
JPMorgan is also paying the Commodity Futures Trading Commission (CFTC) $40 million for the transgressions bringing the total fines and disgorgement to roughly $307 million.
But this was not JPMorgan’s only legal settlement last week. On Friday, JPMorgan filed papers in a federal court in Manhattan agreeing to pay $150 million to resolve a securities fraud lawsuit by investors related to the “London Whale” trading scandal.
The scandal involved a trader in JPMorgan’s London office, Bruno Iksil, who took a massive and reckless bet in the derviatives market in 2012 that cost JPMorgan $6.2 billion in losses. Ironically, the London Whale scandal and losses occurred at the same time that JPMorgan was lobbying the US Congress and regulators against new regulations to rein in risky bets.
Friday’s $150 million civil settlement with investors who lost money due to the London Whale scandal comes after JPMorgan was fined $920 million by US regulators in 2013.
JPMorgan’s rap sheet of criminal and civil offenses is almost growing by the day. If only the Justice Department had a policy of actually prosecuting the corporate executives responsible for crimes instead of issuing relatively meager fines on one of the biggest banks in the world.