2023-06-22 12:15:44 ET
J.P. Morgan Securities, part of JPMorgan Chase ( NYSE: JPM ), agreed on Thursday to pay $4M to settle a Securities and Exchange Commission investigation into alleged recordkeeping violations. Under the settlement, the company neither admits nor denies the SEC's findings.
The SEC alleges that the company mistakenly deleted ~47M electronic communications from ~8,700 email boxes for the period of Jan. 1, 2018-April 23, 2018, many of which were required to be retained according to broker-dealer recordkeeping rules.
As a result, the company had been unable to produce documents and communications that were requested in relation to at least 12 civil securities-related investigations, eight of which were conducted by SEC staff.
According to the SEC order, the e-mails were deleted when JPMorgan ( JPM ) employees undertook a project to delete older communications and documents that were no longer required to be retained. In June 2019, the JPM employees proceeded to delete emails on the belief that all documents were coded in a way to prevent permanent deletion of records still within the 36-month regulatory retention window.
However, the vendor involved did not apply the default retention settings in a particular domain, and "those communications, including many required to be maintained pursuant to the broker-dealer recordkeeping rules, were permanently deleted," the SEC said. The 47M electronic communications of JPMorgan employees in the Chase banking retail group became unrecoverable.
JPMorgan Chase ( JPM ) stock dropped 1.5% in Thursday afternoon trading, during a session when most bank stocks have declined. The KBW Nasdaq Bank Index ( BKX ) has dropped 1.8% .
In 2021, JPMorgan ( JPM ) agreed to pay $200M to settle charges that it failed to maintain records when employees used their personal devices to communicate with each other about business matters.
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JPMorgan agrees to pay $4M to settle SEC probe on 47M deleted records