U.S. regulators have fined JPMorgan US$250 million for failing to prevent conflicts of interest in its fiduciary business.
The Office of the Comptroller of the Currency (OCC) announced the civil penalty against JPMorgan Chase Bank, N.A., citing the bank’s inadequate internal controls and audit procedures.
According to the regulator, JPMorgan has one of the world’s largest, most complex fiduciary businesses, with US$1.3 trillion in fiduciary assets and US$27.8 trillion of non-fiduciary custody assets.
Yet, the OCC found that for “several years, the bank maintained a weak management and control framework for its fiduciary activities and had an insufficient audit program for, and inadequate internal controls over, those activities.”
As a result, the OCC said “the bank’s risk management practices were deficient and it lacked a sufficient framework to avoid conflicts of interest.”
The bank settled without admitting or denying the regulator’s findings.
The OCC noted that JPMorgan has since remediated the deficiencies.