JPMorgan Fined $1.8 Million by Singapore Regulator for Misconduct in Bond Transactions

Posted on January 6th, 2025 at 12:11 PM
JPMorgan Fined $1.8 Million by Singapore Regulator for Misconduct in Bond Transactions

From the desk of Jim Eccleston at Eccleston Law

The Monetary Authority of Singapore (MAS) fined JPMorgan Chase & Co. $1.8 million for failing to prevent and detect misconduct by its relationship managers during 24 over-the-counter (OTC) bond transactions between November 2018 and September 2019.

According to InvestmentNews, relationship managers provided clients with inaccurate or incomplete disclosures, causing transaction spreads to exceed pre-agreed rates. In those transactions, JPMorgan charged clients a spread over interbank prices, which were not disclosed to clients. This lack of transparency forced clients to rely solely on the relationship manager's representations about interbank prices and spreads.

As reported by InvestmentNews, MAS determined that JPMorgan failed to establish adequate controls to ensure compliance with agreed-upon spreads. This resulted in violations of sections 201(c) and 201(d) of Singapore’s Securities and Futures Act (SFA), which prohibit misrepresentation and omission of material facts in financial transactions.

JPMorgan admitted liability under section 236C of the SFA, paid the penalty, refunded affected clients for the overcharged fees, implemented improvements to its pricing frameworks and internal controls, and initiated ongoing reviews of the relationship managers involved in the misconduct to address compliance concerns.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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