Australia Securities & Investment Commission Fines JP Morgan $511,000 for Allowing Client Orders on Wheat Futures Trading to Manipulate Market in 36 Orders in 2022
9th May 2024 | Hong Kong
The Australia Securities & Investment Commission (ASIC) has fined JP Morgan $511,000 (AUD 775,000) for allowing client orders on wheat futures trading to manipulate market in 36 orders in 2022. ASIC: “Following an ASIC investigation, the Markets Disciplinary Panel (MDP) has fined J.P. Morgan Securities Australia Limited (JPMSAL) $775,000 for permitting suspicious client orders to be placed on the futures market, ASX 24. The MDP found JPMSAL should have suspected 36 orders placed by a client between 11 January 2022 and 3 March 2022 were submitted with the intention of creating a false or misleading appearance with respect to the market for, or the price of, the Eastern Australia Wheat futures January 2023 (WMF3) contracts. The MDP’s Infringement Notice outlines that, ‘this case highlighted the responsibility of all market users to pro-actively draw attention to potential rule breaches in order to maintain market integrity, and the importance of timely communication between regulators, market participants and clients to ensure that any potential misconduct is rectified immediately once detected’. The MDP’s view was that, individually and as part of a series, the orders exhibited characteristics of an intention by the client to manipulate the market by ‘marking the close’ (placing orders or trading close to the end of a trading session to influence the daily settlement price of a derivate contract). The MDP found that JPMSAL’s failure to identify its client’s trading as suspicious was ‘careless’, that JPMSAL should have detected the conduct, and should have acted more expeditiously when alerted to it by ASIC. The MDP found JPMSAL should have suspected the client’s orders were suspicious for a number of reasons, including: 1) a large proportion of the orders were entered late in the trading session, including seconds before market close, 2) a large proportion of the orders were small volume orders, including lot sizes of five or less, 3) a number of the sell orders resulted in, or may have resulted in, a decrease to the daily settlement price of WMF3 contracts, and 4) the orders were unusual in the market for WMF3 contracts when considering the history of, and other trading in that product. JPMSAL cooperated with ASIC’s investigation and did not contest that it had breached Rule 3.1.2(1)(b)(iii) of the ASIC Market Integrity Rules (Futures Markets) 2017. JPMSAL has complied with the Infringement Notice and paid the fine. Compliance with the infringement notice is not an admission of guilt or liability and by doing so, JPMSAL is not taken to have contravened subsection 798H(1) of the Corporations Act. View the infringement notice on the MDP Outcomes Register.” In 2024 March, the United States Federal Reserve Board (Fed) & banking regulator OCC (Office of the Comptroller of the Currency) has fined JP Morgan a total of $348.2 million for inadequate monitoring of firm & market misconduct between 2014 to 2024. More info below:
“ Australia Securities & Investment Commission Fines JP Morgan $511,000 for Allowing Client Orders on Wheat Futures Trading to Manipulate Market in 36 Orders in 2022 “
United States Federal Reserve & Banking Regulator OCC Fine JP Morgan $348 Million for Inadequate Monitoring & Market Misconduct Between 2014 to 2024
27th March 2024 |- The United States Federal Reserve Board (Fed) & banking regulator OCC (Office of the Comptroller of the Currency) has fined JP Morgan a total of $348.2 million for inadequate monitoring of firm & market misconduct between 2014 to 2024. United States Fed (14/3/24): “The Federal Reserve Board on Thursday issued an enforcement action against JPMorgan Chase & Co. and fined the firm approximately $98.2 million for an inadequate program to monitor firm and client trading activities for market misconduct. The Board’s action requires JPMorgan Chase to review and take corrective action to address the firm’s inadequate monitoring practices, which occurred between 2014 and 2023. The Board’s action was taken in coordination with the Office of the Comptroller of the Currency. The penalties announced by the Board and the Office of the Comptroller of the Currency total approximately $348.2 million. Also on Thursday, the Board announced the execution of a written agreement with First & Peoples Bancshares, Inc., of Russell, Kentucky, dated March 13, 2024.”
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