The SEC imposed a $4 million penalty on J.P. Morgan Securities LLC, the broker-dealer subsidiary of JPMorgan Chase, for having inadvertently erased approximately 47 million emails from 2018. These emails had been sought by subpoenas within various regulatory probes, according to the SEC's order. In late 2021, the firm consented to pay $125 million in sanctions for its failure to keep text messages and other electronic communications from January 2018 to November 2020.
The Securities and Exchange Commission (SEC) issued an administrative order on Thursday, fining the J.P. Morgan Securities LLC, the broker-dealer subsidiary of JPMorgan Chase, $4 million for inadvertently erasing around 47 million emails from the start of 2018. These emails were requested by subpoenas that were issued in at least twelve regulatory investigations, however, they could not be retrieved. The emails, which were from and to around 8,700 email boxes which included those of up to 7,500 employees communicating with Chase customers, were required to be kept in accordance with federal securities law. J.P. Morgan Securities accepted the SEC sanction and as part of the order were required to cease and desist from committing any future violations. This is the third time the firm has agreed to punishment for its failure to store electronic records, with the most recent being a $125 million penalty for failing to preserve text messages and other electronic communications sent between January 2018 and November 2020. In addition, back in 2005, the firm paid $700,000 as a result of not retaining electronic records from 1999-2002.
JPMorgan began a project in 2016 to delete documents which were no longer needed to be stored, yet the process experienced glitches, resulting in the permanent deletion of required documents. These deletions were revealed in October 2019 when a JPMorgan team discovered the absence of emails from early 2018. JPMorgan informed the SEC of the deletions in January 2020 and notified one of the eight investigative teams of the Commission that its documents in response to the subpoena had been corrupted. As the deleted emails are irretrievable, it remains undetermined what impact they would have had on the investigations. An internal email by a member of JPMorgan's compliance team also stated that the lost documents "could relate to potential future investigations, legal matters and regulatory inquiries."
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