FX news: FSA slaps JP Morgan with biggest fine ever
The UK Financial Services Authority has fined JPMorgan a staggering £33.32 million ($48.8 million) for “failing to protect client money by segregating it appropriately”. Had the bank not complied with the FSA as soon as the regulatory breach was detected, it would have been fined £47.6 million, but for good behaviour it received a 30% discount.
Under FSA rules, firms must keep client money separate from the firm’s money in segregated accounts with trust status to protect it in case the firm goes bust.
The futures and options part of the JPMorgan business held client money of between $1.9 billion and $23 billion over a seven-year period in unsegregated accounts following the merger of JPMorgan and Chase. JPMorgan is the largest holder of client money in the UK.
Margaret Cole, director of enforcement and financial crime at the FSA, said in a statement that this would not be the last fine of its kind: “Firms need to sit up and take notice of this action– we have several more cases in the pipeline.”
In January this year the FSA published a dear CEO letter and a Client Money and Assets report for all firms that have permission to hold client money and assets.