The US Securities and Exchange Commission (SEC) announced in a statement that American investment bank JP Morgan violated the Securities Act and was fined $125 million.
In the statement, it was stated that JP Morgan employees frequently communicated on business matters related to securities using text messages, WhatsApp and personal e-mail accounts, however, personnel contact records were not kept by JP Morgan in accordance with the law.
The SEC said it had confirmed that JP Morgan had committed the alleged “securities law violation” and agreed to pay a $125 million fine.
Sanjay Wadhwa, SEC’s deputy chief executive officer, said:
“This fine against JPMorgan reflects the seriousness of such violations. Firms should share information with the SEC rather than hindering their mission of investor protection.”
While the SEC’s fine on JP Morgan was nearly ten times the $15 million fine for Morgan Stanley’s failure to log emails in 2006, SEC chairman Gary Gensler said: “The $125 million fine is 0.25% of JP Morgan’s annual profits and approximately 1% of its quarterly profits.” said.
The multimillion-dollar fine to JP Morgan has been interpreted as a warning to banks on Wall Street to tighten communication control and record-keeping procedures among employees, which have become more complex due to the Covid-19 pandemic.