Monetary Authority of Singapore Fines JPMorgan Over Inaccurate Disclosures

The Monetary Authority of Singapore (MAS) has imposed a civil penalty of $2.4 million Singapore dollars (about $1.8 million) on JPMorgan Chase Bank, N.A., alleging misconduct by the bank’s relationship managers (RMs).

The MAS found 24 over-the-counter (OTC) bond transactions in which JPMorgan’s relationship managers made inaccurate or incomplete disclosures to clients, and the bank failed to prevent and detect this misconduct, the regulator said in a Monday (Dec. 2) press release.

“This enforcement action on JPM follows MAS’ review of pricing and disclosure practices in the private banking industry,” the release said. “Investigations found that for OTC bond transactions, JPM’s practice was to charge clients a spread over the interbank prices. As the interbank prices were not available to clients, they had to rely on the RMs’ representations to them regarding the interbank prices and spreads.”

In the transactions highlighted by the investigation, the relationship managers did not tell clients that the spreads charged were above the rates upon which they had agreed, according to the release.

JPMorgan did not immediately reply to PYMNTS’ request for comment.

In a statement provided to Reuters, JPMorgan said that the instances cited by the MAS account for “a very small portion” of the total trades it processed at the time.

“In 2020, after completing our internal review, JPMorgan Private Bank undertook a comprehensive update to its internal controls, monitoring and training framework to ensure our trade governance, pricing transparency and compliance principles continue to be upheld,” the bank said, per the report.

The MAS said in its press release that JPMorgan refunded the overcharged fees to clients and enhanced its pricing frameworks and internal controls, according to the report.

In an earlier, separate action in the United States, the Securities and Exchange Commission (SEC) said Nov. 1 that that two affiliates of JPMorgan — JPMorgan Securities and JPMorgan Investment Management — agreed to pay $151 million in combined civil penalties and voluntary payments to investors to settle SEC enforcement actions.

The settlements came after the SEC charged the affiliates in five separate enforcement actions that alleged misleading disclosures to investors, breach of fiduciary duty, prohibited joint transactions and principal trades, and failures to make recommendations in the best interests of customers.

Reached by PYMNTS at the time, a JPMorgan Chase spokesperson provided an emailed statement saying, “When issues are identified, we fix them and engage with our regulators to resolve any concerns.”