The US Securities and Exchange Commission (SEC) has charged JP Morgan Securities and JP Morgan Investment Management Inc. (JPMIM) in five separate actions.
In neither admitting or denying culpability, JPM has agreed to pay the $151 million in penalties.
The affiliates of JP Morgan Chase and Co. were charged with misleading disclosures to brokerage customers that invested in their ‘conduit’ private funds products, subjecting them to market risk, and failed to disclose financial incentives when recommending their Portfolio Management Program and Clone Mutual Funds.
The SEC also charged JPMIM with carrying out prohibited joint transactions worth $4.3 billion, and engaging in 65 prohibited principal trades valued at $8.2 billion.
Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, commented: “JP Morgan’s conduct across multiple business lines violated various laws designed to protect investors from the risks of self-dealing and conflicts of interest. With today’s settlements, which include multiple self-reports and large voluntary payments to harmed investors, JP Morgan is being held accountable for its regulatory failures.”