SINGAPORE: The Monetary Authority of Singapore (MAS) imposed a S$2.4 million civil penalty on JPMorgan Chase Bank, N.A. (JPM) for failing to prevent and detect misconduct by its relationship managers (RMs).
The penalty follows investigations into 24 over-the-counter (OTC) bond transactions where RMs provided inaccurate or incomplete information to clients, leading to spreads charged above agreed rates, as reported by The Edge Singapore.
MAS found that JPM charged clients a spread over interbank prices for OTC bond transactions. Since clients could not access interbank prices, they had to rely on RMs for interbank prices and spreads.
According to MAS, JPM lacked “adequate processes and controls” to ensure its RMs followed pre-agreed spreads when handling transactions with clients.
MAS discovered that in the 24 transactions reviewed, RMs either misrepresented pricing details or withheld important information about spreads being higher than agreed rates, violating sections 201(c) and 201(d) of the Securities and Futures Act (SFA).
JPM admitted liability under section 236C of the SFA, paid the civil penalty, and refunded affected clients with the overcharged fees. The bank has since strengthened its pricing frameworks and internal controls to prevent similar misconduct from happening again.
Investigations into the individual RMs involved are also still ongoing. /TISG
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