The MAS has imposed a civil penalty of $2.4m on JPMorgan Chase Bank for lapses in oversight that allowed relationship managers (RMs) to overcharge clients in 24 OTC bond transactions.
This penalty comes as part of MAS’ broader scrutiny of pricing and disclosure practices within the private banking sector.
According to the MAS, JPMorgan’s RMs failed to provide accurate disclosures to clients, resulting in charges above the bilaterally agreed spreads. These overcharges stemmed from the RMs’ inaccurate representations of interbank prices, which clients could not independently verify. This misconduct was in violation of sections 201(c) and 201(d) of the Securities and Futures Act (SFA).
JPMorgan has acknowledged its liability under section 236C of the SFA for failing to detect or prevent these discrepancies. In response to the findings, the bank has refunded the overcharged amounts to the affected clients and has committed to enhancing its pricing frameworks and internal controls to prevent such incidents in the future. MAS is also conducting separate reviews concerning the RMs involved in these transactions to ensure compliance and accountability.
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