J.P. Morgan Securities Fined $200 Mln By CFTC For Failure To Record Client Orders

(RTTNews) - The U.S. Commodity Futures Trading Commission or CFTC ordered J.P. Morgan Securities LLC to pay a $200 million civil monetary penalty to resolve allegations of inadequately capturing billions of client orders in its surveillance systems.

The CFTC noted that JPMorgan admitted the facts in the order in two sections: scope of surveillance data gaps and causes of surveillance data gaps.

According to the order, in 2021, in the course of onboarding a new trading exchange, J.P. Morgan discovered its surveillance of trading on multiple venues and trading systems was not operating correctly, resulting in gaps in J.P. Morgan's trade surveillance on these venues.

The surveillance gaps resulted from J.P. Morgan's failure to configure certain data feeds to ensure complete trade and order data were being ingested by J.P. Morgan's surveillance tools. On a specific U.S. designated contract market, J.P. Morgan failed to ingest into its surveillance systems—and thus failed to surveil—billions of order messages from 2014 through 2021, which, according to J.P. Morgan, largely consisted of sponsored access trading activity for three significant algorithmic trading firms. J.P. Morgan has represented the surveillance gaps were fully remediated by 2023.