It was announced on Monday that JPMorgan Chase has been fined $2.4 million by the Monetary Authority of Singapore (MAS).
The regulator said the bank failed to prevent misconduct by relationship managers (RMs) during 24 over-the-counter (OTC) bond transactions between November 2018 and September 2019.
The punishment follows a review of pricing and disclosure practices in Singapore’s private banking sector.
The misconduct is said to have included RMs making inaccurate or incomplete disclosures to clients about the spreads charged on the 24 bond transactions.
MAS explained that customers were overcharged for spreads that exceeded pre-agreed rates, and relied solely on RMs as interbank pricing information was not directly available to them.
MAS added that JPMorgan lacked adequate processes and controls to ensure compliance with client agreements, violating certain sections of the Securities and Futures Act (SFA).
“MAS sampled OTC bond transactions conducted by RMs at JPM and found that in the 24 transactions, the RMs either misrepresented price components or omitted material information that the spreads charged were higher than agreed-upon rates, inconsistent with Sections 201 ( c) and 201(d) of the Securities and Futures Act (SFA),’ MAS reported.
The regulator stated that JPMorgan admitted liability, paid the civil penalty, and refunded funds to affected customers.
The bank has also since strengthened its pricing frameworks and internal controls to prevent similar lapses, although separate investigations are ongoing into the individual risk managers involved.