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JP Morgan Fined for Overcharging Bond Spreads on 24 OTC Transactions
December 3, 2024
The Monetary Authority of Singapore (MAS) fined JPMorgan Chase $1.7mn (S$2.4mn) for not preventing its private bankers from overcharging clients on 24 OTC bond transactions in 2018 and 2019. This occurred when relationship managers (RMs) charged spreads above the agreed rates, misleading clients regarding bond pricing. MAS found that JPMorgan lacked sufficient processes and controls to ensure RMs adhered to pre-agreed spreads, with clients relying on the RMs’ representations about interbank prices. This violated the Securities and Futures Act (SFA). This comes on the back of MAS’ broader review of pricing and disclosure practices in the private banking sector. JPMorgan has refunded the overcharged fees to the clients affected and admitted liability. Besides, they have also enhanced internal controls and pricing practices to prevent similar incidents in the future.
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