By Jonathan Stempel
NEW YORK (Reuters) -JPMorgan Chase will pay $151 million to resolve five U.S. Securities and Exchange Commission enforcement cases, including allegations that the largest U.S. bank made misleading disclosures to brokerage clients, it said. on Thursday the regulator.
The settlements include $61 million in civil penalties and $90 million in customer refunds. JPMorgan neither admitted nor denied wrongdoing in agreeing to the settlements.
“JPMorgan's conduct across multiple lines of business violated several laws designed to protect investors from the risks of proprietary trading and conflicts of interest,” Sanjay Wadhwa, acting director of JPMorgan's enforcement division, said in a statement. SEC law.
In the largest settlement, JPMorgan will pay a $10 million civil penalty and refund $90 million to clients who invested in “conduit” products.
These products pooled clients' money to invest in private equity or hedge funds that would then distribute shares of publicly traded companies.
The SEC said JPMorgan did not disclose that it had complete discretion over when to sell shares and how many to distribute. He said this exposed clients to market risks even as prices fell because the bank took months to sell the shares.
JPMorgan was separately fined $45 million for failing to fully disclose from July 2017 to October 2024 how the bank and its brokers could benefit financially by recommending some in-house investments instead of similar products managed by third parties.
In a statement, the New York-based bank said it was pleased to reach a settlement, strived to maintain high standards in serving customers and resolving issues when they arise.
The SEC also accused JPMorgan of recommending some mutual funds to 10,500 retail brokerage clients when materially less expensive but otherwise identical exchange-traded fund (ETF) products were available.
JPMorgan voluntarily returned $15.2 million to those clients and was not fined after reporting the problem, the SEC said.
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