JPMorgan to pay $4 mn fine to SEC as it mistakenly deletes 47 mn records

By Austin Weinstein

JPMorgan Chase & Co. will pay a $4 million fine to settle Securities and Exchange Commission allegations that the bank mistakenly deleted millions of electronic records, leaving communications unavailable to regulators in a dozen investigations. 
 

The SEC alleged Thursday that JPMorgan Securities permanently deleted 47 million electronic records, including emails and instant messages, from January 2018 to April 2018. As a result, the regulator said that JPMorgan could not come up with requested documents in eight SEC investigations and four other regulatory probes. The SEC didn’t say whether those actions were focused on the bank. 

“Because the deleted records are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations,” the SEC said in a settlement order.

JPMorgan declined to comment. The bank didn’t admit to or deny the regulator’s allegations. 

In 2021, the bank paid $125 million to the SEC and $75 million to the Commodity Futures Trading Commission to settle allegations that the firm broke rules by not saving business communications on platforms like WhatsApp. Other banks would pay fines for similar conduct the next year.

Brokerages like JPMorgan Securities are required to retain records of business communications sent and received for at least three years, the SEC said.

In Thursday’s settlement, the regulator alleged that the firm mistakenly deleted millions of communications from the first quarter of 2018 as it was troubleshooting glitches. The vendor responsible for archiving bank records had told JPMorgan that the records would be protected, the SEC said. 

But the vendor had not protected the emails sent to the “Chase” communications domain, the regulator alleged. As a result, those records were wiped, including the email inboxes of as many as 7,500 employees who had regular contact with Chase customers.