Earlier this week, the United States Securities and Exchange Commission (SEC) issued a $4 million fine to JPMorgan Chase for allegedly deleting roughly 47 million emails amid several securities-related investigations into the financial giant.
JP Morgan: We mistakenly deleted 47 million records
The Pentagon: We mistakenly sent $6.2 billion to Ukraine
The Fed: We mistakenly printed $32 trillion dollars
Where does it stop?
— Not Jerome Powell (@alifarhat79) June 23, 2023
According to the SEC, emails and instant messages were deleted in 2019 by JPMorgan Securities. The settlement order states that the messages — which were dated between January and April 2018 — had been deleted from roughly 8,700 different mailboxes that belonged to as many as 7,500 employees.
JPMorgan Chase is currently facing at least a dozen regulatory investigations, and many of those emails reportedly included business records that were being sought by investigators. The SEC’s rules require that these types of records be retained for three years.
“Because the deleted records are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations,” the SEC wrote in the order. “Indeed, a member of JPMorgan’s compliance department acknowledged in an internal email after the deletion event was discovered that lost documents could relate to potential future investigations, legal matters and regulatory inquiries.”
The SEC also ordered the financial giant to “cease and desist from committing any future violations.”
According to the settlement order, the messages were deleted because of a project initiated by JPMorgan in 2016, which deleted “older communications and documents no longer required to be retained” from their system. The project allegedly experienced “glitches” resulting in “the identified documents not, in fact, being expunged.”
“In June 2019, while troubleshooting the issue, firm employees executed deletion tasks on electronic communications from the first quarter of 2018, erroneously believing, based on written representations from JPMorgan’s archiving vendor, that all the documents were coded in a way to prevent permanent deletion of records still within the thirty-six month regulatory retention period,” the order added.
“The eComm Tech team and the vendor investigated the issue, and learned that electronic communications in the Chase domain which had been the target of the troubleshooting tasks had not, in fact, been properly coded by the vendor with the thirty-six month default retention and actually had been deleted,” the order continued.
JPMorgan has agreed to the SEC’s sanction, though the financial giant did not confirm or deny the veracity of the allegations in their comments to media outlets.
“JPMorgan takes its record-keeping obligations seriously,” JPMorgan said in a statement, according to Reuters.
This fine comes soon after JPMorgan Chase agreed to a massive settlement with victims of convicted trafficker Jeffrey Epstein, agreeing to pay $290 million in a class action lawsuit on behalf of more than 40 victims of the deceased criminal. The settlement came because the financial giant provided services to Epstein for 15 years, only choosing to sever ties with him in 2013 — five years after his first conviction.
