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JP Morgan Chase, which is at the center of some major regulation breaches has suffered a massive reputational and financial hit, due to a series of legal oversights around regulatory requirements.
A report highlights how JP Morgan incurred fines totaling $39.34 billion for various violations, alongside a massive fine of $23.46 billion which was related to toxic securies abuse.
Failure to comply with investor protection policies led to a $6.25 billion fine, followed by a $ 5.36 billion tag for mortgage abuses.
Banking violations led to fines totaling $4.26 billion with with other breaches leading to an amassed $ 6.81 billion.
Financial violations accounted for the highest amount totaling $26.66 billion across 117 records, followed by consumer protection at $8.62 billion, with government contracting violations following at $0.61 billion.
Employment-related offenses totaled 0.52 billion from 50 records.
The research recorded looked at penalties incurred over the past two decades and the report stated part of the reasons as complex:
“The cost of fines incurred by JPMorgan Chase is hefty, and it compliments the fact that such institutions operate in a complex environment, and occasional legal issues may arise due to the intricate nature of financial markets, transactions, and regulatory compliance. When violations occur, they are typically addressed through legal proceedings, settlements, or regulatory actions. The lack of adequate internal controls, combined with a failure to address misconduct promptly, has potentially allowed unethical practices to play out over the years, resulting in hefty fines,” read the report.
This highlights the reality of a likely increase in the number of future penalties as regulators implement measures to curb violations.
This is a financial and reputational hit for JP Morgan Chase and has brought attention to the banking industry’s challenges in tackling related offenses.
Yes, the fines are not from an isolated incident but rather an indication of some systemic issues flagged over the years.
While the bank may likely be able to carry the fines, it’s the reputational risk that’s at stake, which may directly or indirectly affect its overall financial performance.
This has as a result raised questions about the practices of the banking industry, with critics advocating for stricter oversight including regulatory reforms to prevent similar situations from happening in the future.