2 affiliates of JP Morgan settle enforcement actions for USD151M
Date
11/3/2024 4:55:53 AM
(MENAFN) Two affiliates of investment banking giant JP Morgan have agreed to pay over USD151 million in combined civil penalties and voluntary payments to investors to settle four enforcement actions. These actions involve J.P. Morgan Securities LLC (JPMS) and J.P. Morgan Investment Management Inc., and they pertain to several significant violations. The issues highlighted include failures to provide necessary disclosures to investors, breaches of fiduciary duty, prohibited joint transactions, and principal trades, as well as shortcomings in making recommendations that are in the best interests of their customers.
The US Securities and Exchange Commission (SEC) announced on Thursday that JPMS had made misleading disclosures to brokerage customers who invested in its “Conduit” private funds products. These funds pooled customer money and invested in private equity or hedge funds, which later allocated shares of companies that went public to the Conduit private funds. The SEC's findings reveal serious lapses in transparency and adherence to regulatory standards.
Sanjay Wadhwa, the acting director of the SEC’s Division of Enforcement, remarked that JP Morgan's actions across multiple business lines represented violations of various laws designed to safeguard investors from risks associated with self-dealing and conflicts of interest. This situation underscores the importance of regulatory compliance and the responsibility that financial institutions have to their clients.
The resolution of these actions serves as a reminder of the rigorous oversight that exists in the financial sector and the consequences of failing to uphold the standards expected of investment firms. The hefty penalties reflect the severity of the violations and are aimed at reinforcing investor protection in the financial markets.
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