US OCC Fines JPMorgan $250 million for Weak Controls Over Fiduciary Activities

Updated on its official website, the Office of the Comptroller of the Currency ("OCC") has assessed a USD 250 million civil money penalty against JPMorgan Chase for the bank's failure to maintain adequate internal controls and internal audit over its fiduciary business.

The deficiencies identified by the OCC constituted unsafe or unsound practices that were part of "a pattern of misconduct" , says the consent order.

According to the announcement, the OCC said it found that JPMorgan for several years maintained a "weak management and control framework for its fiduciary activities" and had an insufficient audit programme for, and inadequate internal controls over, those activities.

Among other things, the Bank had deficient risk management practices and an insufficient framework for avoiding conflicts of interest.

For engaging in unsafe or unsound practices, including those relating to internal controls and internal audit for its fiduciary activities, and for violating the law, the OCC stated that the Bank violated a requirement for banks to arrange for a suitable audit over all significant fiduciary activities.

​JPMorgan neither admits nor denies the OCC's findings, but is said to have remediated the deficiencies that led to the penalty action.

A JPMorgan spokesperson said, "We are committed to delivering best-in-class controls across our business, and we have invested significantly in and enhanced our controls platform over the last several years to address the issues identified."

The USD 250 million penalty will be paid to the US Treasury.