The US Securities and Exchange Commission (SEC) has charged JP Morgan Securities and JP Morgan Investment Management Inc. (JPMIM) in five distinct actions.
JPM has agreed to pay $151 million in penalties without admitting or denying wrongdoing. The charges involve misleading disclosures made to brokerage customers who invested in their ‘conduit’ private funds products, which exposed them to market risk. Additionally, JPM failed to disclose financial incentives when recommending their Portfolio Management Program and Clone Mutual Funds.
The SEC also accused JPMIM of conducting prohibited joint transactions totaling $4.3 billion and engaging in 65 prohibited principal trades valued at $8.2 billion.
Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, commented: “JP Morgan’s conduct across multiple business lines violated various laws designed to protect investors from the risks of self-dealing and conflicts of interest. With today’s settlements, which include multiple self-reports and large voluntary payments to harmed investors, JP Morgan is being held accountable for its regulatory failures.”