JPMorgan Chase & Co sent the wrong emails

Do you think JPMorgan was doing a lot of crimes in the group chat? We have no way of knowing. Last week US regulators fined JPMorgan Chase & Co a total of $200 million for violating record-keeping requirements. From the Securities and Exchange Commission’s announcement:
As described in the SEC’s order, JPMS admitted that from at least January 2018 through November 2020, its employees often communicated about securities business matters on their personal devices, using text messages, WhatsApp, and personal email accounts. None of these records were preserved by the firm as required by the federal securities laws. JPMS further admitted that these failures were firm-wide and that practices were not hidden within the firm. Indeed, supervisors, including managing directors and other senior supervisors — the very people responsible for implementing and ensuring compliance with JPMS’s policies and procedures – used their personal devices to communicate about the firm’s securities business.
JPMS received both subpoenas for documents and voluntary requests from SEC staff in numerous investigations during the time period that the firm failed to maintain required records. In responding to these subpoenas and requests, JPMS frequently did not search for relevant records contained on the personal devices of its employees.
JPMS acknowledged that its recordkeeping failures deprived the SEC staff of timely access to evidence and potential sources of information for extended periods of time and in some instances permanently. As such, the firm’s actions meaningfully impacted the SEC’s ability to investigate potential violations of the federal securities laws.
The SEC took $125 million from JPMorgan for this; the Commodity Futures Trading Commission took another $75 million for similar violations. Were they discussing crimes in these unsupervised chats? Well, there were “numerous investigations” during this period, so the SEC (and CFTC) thought they at least might have been doing some bad stuff. Certainly there is a history of banks doing bad stuff in chats; again from the SEC announcement:
“Since the 1930s, recordkeeping and books-and-records obligations have been an essential part of market integrity and a foundational component of the SEC’s ability to be an effective cop on the beat.
As technology changes, it’s even more important that registrants ensure that their communications are appropriately recorded and are not conducted outside of official channels in order to avoid market oversight,” said SEC Chair Gary Gensler.
“Unfortunately, in the past we’ve seen violations in the financial markets that were committed using unofficial communications channels, such as the foreign exchange scandal of 2013.”
And of course the SEC didn’t get to see all those texts and personal emails and WhatsApp messages, so it doesn’t know if they were about crimes and neither do I. But the SEC did manage to get at least thousands and thousands of those messages, and from its summary they sound fine?
Do you think they also sometimes sent each other crude jokes or gossiped about colleagues or made fun of clients? Because if they did, the SEC doesn’t mention it. It sounds like these chats were earnest and businesslike and honestly kind of boring.

—Bloomberg