Washington D.C. – JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, and J.P. Morgan Securities, plc (collectively, J.P. Morgan) have been slapped with an $850,000 penalty by the Commodity Futures Trading Commission (CFTC) for failing to accurately report swap transactions, according to an order issued today.
The CFTC found that between September 2015 and February 2020, J.P. Morgan failed to report approximately 2.1 million short-dated foreign exchange (FX) swap transactions. These unreported transactions accounted for roughly 51% of all FX swaps executed by the firm during that period.
Short-dated FX swaps involve the immediate exchange of currencies, followed by a reversal of that exchange the next business day. The CFTC maintains these are reportable transactions due to their defined exchange and reversal dates, and J.P. Morgan was legally obligated to report them—a requirement the firm allegedly ignored.
“Timely and accurate reporting of swaps transactions by registered swaps dealers is critical to the CFTC’s mission to protect market participants and ensure market transparency and integrity,” stated CFTC Acting Director of Enforcement Gretchen Lowe.
J.P. Morgan has since claimed to have reported all previously unreported FX swap transactions. The order mandates that J.P. Morgan cease and desist from any further violations of the Commodity Exchange Act (CEA) or CFTC regulations.
The case was led by CFTC staff members Brett Shanks, Jennifer Chapin, Lauren Fulks, Tom Simek, Christopher Reed, Charles Marvine, and former staff member Jo Mettenburg.
The CFTC encourages individuals with information regarding potential violations of commodity trading laws to submit tips via its toll-free hotline (866-FON-CFTC), online complaint form, or through the CFTC Whistleblower Office. Whistleblowers may be eligible for financial rewards of 10-30% of collected monetary sanctions.
Source: CFTC.gov
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