The Securities and Exchange Commission has sued J.P. Morgan Securities LLC (JPMS) and J.P. Morgan Investment Management Inc. (JPMIM) – both affiliates of JPMorgan Chase & Co. (JP Morgan) – in five separate enforcement actions for failures including misleading disclosures to investors, breach of fiduciary duty, prohibited joint transactions and principal trades and failures to make recommendations in the best interest of customers.

These are not trivial accusations but the average payment is only USD30m and that includes compensations to customers. That included USD90 million to holders of one specific account. The actual penalty was USD10 which, the SEC says, will also be distributed to account holders.

The average is distorted because no penalty was imposed on Securities because the company " cooperated in the investigation and undertook remedial measures." Th

The misconduct was not trivial: aside from the Securities misconduct above,

- from July 2017 and October 2024, Securities failed to correctly disclose benefits paid to staff to sell its own products vis a vis products of competitors. For that, a cease and desist censure was issued.

- between June 2020 and July 2022, Securities recommended so-called "clone mutual funds" when "materially less expensive" products were available, offering the same portfolios. 17,500 wrong contracts were sold. No penalty has been applied because Securities self-reported and has refunded approx USD15m to the victims (which the SEC benignly terms "impacted customers").

- USD4,300 million worth of "prohibited joint transactions" benefited a connected party: USD5 million penalty.

- USD8,200 million worth of "prohibited principle trades" were conducted when "a JPMIM portfolio manager directed an unaffiliated broker-dealer to buy commercial paper or short-term fixed income securities from JPMS, which JPMIM then purchased on behalf of one of its clients. " Result? A cease and desist order and a USD1 penalty.

If JPM wasn't already a bank, it would be laughing all the way to one.

Full release and associated documents: https://www.sec.gov/newsroom/press-releases/2024-178