JP Morgan Fined £33.3m
By JB at 3 June, 2010, 3:48 pm
JP Morgan has been hit with a record fine by the Financial Services Authority today for failing to separate the cash of clients and company cash. The company has been fined a record amount of £33.3 million when it was discovered that cash balances kept by clients of its large future and options business from the companies main funds of JPMorgan Chase Bank.
The amount of client money at risk was between £1.3bnand the worst thing was that the clients had no idea that their money was at risk until the announcement this morning.
A spokesperson for JP Morgan declined to comment surprisingly on this fine and wouldn’t if any individuals at the bank had been punished as a result of the discovery.
The problems at JP Morgan took place over a seven year period between 2002 and 2009 and were only discovered in July last year.
Margaret Cole, director of enforcement and financial crime at the FSA, said:
“This penalty sends out a strong message to firms of all sizes that they must ensure client money is segregated in accordance with FSA rules.”
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I’m glad to see the FSA is finally doing what it was set up to do and holding our financial industry to account. Hopefully this is a sign of things to come and we will see the whole sector become more respectable with time.
I just wonder if Mr Cameron will allow the FSA the power and space they need to see that the job is done properly?