JPMorgan Fined $2.4m By Monetary Authority of Singapore

The regulator said the bank failed to prevent misconduct by its relationship managers (RMs) during 24 over-the-counter (OTC) bond transactions between November 2018 and September 2019.

The penalty follows a review of pricing and disclosure practices in Singapore’s private banking sector.

The misconduct is said to have involved RMs making inaccurate or incomplete disclosures to clients about the spreads charged on those 24 bond transactions.

MAS explained that clients were overcharged spreads that exceeded pre-agreed rates, relying solely on RMs’ representations since interbank pricing information was not directly available to them.

MAS added that JPMorgan lacked sufficient processes and controls to ensure adherence to client agreements, violating certain sections of the Securities and Futures Act (SFA).

“MAS sampled OTC bond transactions conducted by JPM’s RMs and found that in the 24 transactions, RMs had either misrepresented the price components or omitted material information that the spreads charged were above the agreed rates, in contravention of sections 201(c) and 201(d) of the Securities and Futures Act (SFA),” MAS stated.

The regulator stated that JPMorgan admitted liability, paid the civil penalty, and refunded affected clients.

It is reported that the bank has also since strengthened its pricing frameworks and internal controls to prevent similar lapses, although there are ongoing separate investigations into the individual RMs involved.