Singapore c.bank fines JPMorgan $2.4m for misconduct by relationship managers

The Monetary Authority of Singapore (MAS) announced on Monday that it had levied a $2.4 million civil penalty on JPMorgan Chase Bank, N.A. (JPM) for failing to prevent misconduct by its relationship managers (RMs). The bank’s RMs were found to have misrepresented or omitted key details in 24 over-the-counter (OTC) bond transactions, resulting in clients being charged higher spreads than agreed upon.

The transactions, which occurred between November 2018 and September 2019, involved the bank charging clients spreads above the rates that had been bilaterally agreed. These actions violated the Securities and Futures Act (SFA), with JPMorgan admitting liability for failing to detect or prevent the misconduct.

The MAS’s investigation revealed that JPM’s internal controls were insufficient, allowing RMs to make inaccurate disclosures regarding pricing in OTC bond trades. Clients, who had to rely on the RMs for pricing information as interbank prices were not available to them, were misled into paying inflated fees.

In addition to paying the fine, JPMorgan has refunded the affected clients and implemented enhanced pricing frameworks and controls to avoid future incidents. The bank also confirmed that separate investigations into the individual RMs involved are still ongoing.

“The bank has refunded the overcharged fees to affected clients. The bank has also enhanced its pricing frameworks and internal controls to prevent the recurrence of such misconduct,” MAS statement read.

Attribution: MAS statement