JPM’s Securities Arm to Cough Up $4M, Resolves Regulatory Dispute

JPMorgan Chase’s (NYSE:JPM) investment management company, J.P. Morgan Securities, will pay $4 million in a settlement with the SEC (Securities and Exchange Commission). The move comes after the financial services company accidentally deleted electronic messages that it was required to retain for a minimum of three years.

During the process of removing outdated communications and documents that were no longer necessary to retain, JPMorgan Chase inadvertently erased roughly 47 million electronic communications from approximately 8,700 electronic mailboxes. This unintentional deletion occurred between January 1, 2018 and April 23, 2018.

Surprisingly, it wasn’t until October 2019 that JPMorgan Chase became aware of the permanent deletion of electronic communications. It was the company’s legal discovery team that ultimately discovered the absence of these electronic communications.

JPMorgan reported the deletion of messages to the Commission in January 2020.

JPM Is Exposed to Legal and Regulatory Risks

This isn’t the first time JPM has been fined for violating rules related to record-keeping. In December 2021, the SEC and The Commodity Futures Trading Commission fined JPM $200 million for its failure to keep employee communications on personal devices, messaging apps like WhatsApp, and emails.

Overall, JPM is exposed to legal and regulatory risks. Our data shows that legal & regulatory risks account for about 19% of the company’s total risks. Meanwhile, JPMorgan’s legal & regulatory risks are higher than the sector average of 16.5%.

What is the Recommendation for J.P. Morgan Stock? 

Wall Street analysts are upbeat about JPM’s prospects. JPMorgan stock has received 15 Buy and Hold recommendations for a Strong Buy consensus rating. Meanwhile, analysts’ average price target of $161.44 implies 15.66% upside potential. 

Disclosure