The Office of the Comptroller of the Currency (OCC) today (24 November) handed down a $250m civil penalty against JPMorgan Chase Bank, N.A. for the bank’s past failure to maintain adequate internal controls and internal audit over its fiduciary business.
The OCC found the bank’s risk management practices were deficient and it lacked a sufficient framework to avoid conflicts of interest.
“These deficiencies constituted unsafe or unsound practices and resulted in a violation of 12 CFR 9.9, which requires a suitable audit over all significant fiduciary activities,” the OCC said.
It reports that the bank has remediated the deficiencies that led to this action. There’s no finding in the resolution that clients were financially harmed.
A spokesperson for JPMorgan Chase told us: “We are committed to delivering best-in-class controls across our business, and we have invested significantly in and enhanced our controls platform over the last several years to address the issues identified.”
The OCC penalty will be paid to the U.S. Treasury. It follows the $400m fine handed to Citibank in October for deficiencies in the bank’s risk management, data governance and internal controls.
You can read the consent order in full here: https://www.occ.gov/static/enforcement-actions/ea2020-067.pdf
JPMorgan Chase spends around $11bn a year on technology although it is understood that the issues that led to the $250bn fine were process issues.
The OCC is a bureau of the US Department of the Treasury and governs the execution of law relating to national banks.