JPMorgan Filed Inaccurate Large Trader Reports, CFTC Says

JPMorgan Chase & Co. will pay $650,000 to settle U.S. regulatory claims that the bank repeatedly filed inaccurate reports about its clients’ derivatives trades.

The bank’s brokerage unit, JPMorgan Securities LLC, filed reports between 2012 and this year with hundreds of errors about clients’ futures and options trades, the Commodity Futures Trading Commission said in a statement today. The unit continued to file inaccurate reports even after the agency flagged the errors to the bank, the CFTC said.

“The large trader reports are vital to the CFTC’s role in monitoring market behavior,” Aitan Goelman, the CFTC’s director of enforcement, said in the statement. “The CFTC will be vigilant in enforcing these rules in order to ensure the integrity of the regulatory structure and to maintain transparency in the markets.”

Brian Marchiony, a JPMorgan spokesman, declined immediate comment.

The CFTC requires futures brokers to submit daily reports, which it uses to assess large traders’ activities and to determine whether they hold speculative positions that exceed regulatory limits. The data is also included in weekly reports on aggregate market activities that are then disclosed to the public.

JPMorgan has been penalized for inaccurate trade reporting before. The firm was among at least three dealers to be sanctioned this year by the Financial Industry Regulatory Authority for not properly reporting trades to bond-price system known as Trace. The bank neglected to post trades or missed deadlines in at least 6,300 instances over a two-year period, Finra said.

Holding back information on trades can give Wall Street dealers an advantage over customers seeking a fair price, undermining Finra’s stated goal of equal access for all participants to real-time data.

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