JPMorgan (NYSE:JPM) has deleted a whopping 47 million emails in the bank’s latest scandal.
The bank has been fined $4 million by the U.S. Securities and Exchange Commission (SEC) after about 47 million emails belonging to its retail banking group were mistakenly and permanently deleted according to Reuters.
JPMorgan’s latest scandal is taking retail investors back to when TD Ameritrade’s Bartlett Warehouse mysteriously burned down after the SEC announced 60 hedge funds were to undergo investigations for manipulative short selling.
The emails dated from Jan. 1 to April 23, 2018, and were deleted in June 2019 from about 8,700 mailboxes, including those belonging to as many as 7,500 employees who regularly worked with customers.
Many of the emails were business records that the largest U.S. bank was required under SEC rules to keep for three years.
The deletions occurred after JPMorgan’s corporate compliance technology department, which had been trying unsuccessfully to delete some communications from the 1970s and 1980s, sought help from an outside vendor managing the bank’s email storage.
According to a cease-and-desist order, the vendor failed to properly apply the three-year retention setting to “Chase” emails from early 2018.
“As a result, the troubleshooting exercise permanently deleted all of the emails in that domain from that period which were not subject to legal holds,” the order said.
JPMorgan, which is based in New York, did not admit or deny wrongdoing in agreeing to the civil settlement. It has adopted its own email coding procedures to avoid a recurrence.
“JPMorgan takes its record-keeping obligations seriously,” the bank said in a statement.
According to the SEC, JPMorgan has been unable in at least 12 civil securities-related regulatory probes to comply with subpoenas and document requests for communications that had been permanently deleted.
JPMorgan to Pay $290 Million in New Epstein Case
One of JPMorgan’s bigger and also recent scandals is that of the Jeffrey Epstein case.
JPMorgan has agreed to pay a $290 Million settlement in the new Jeffrey Epstein case.
“Any association with (Epstein) was a mistake and we regret it,” JPMorgan said in a statement.
“We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes.”
PMorgan Chase agreed to pay about $290 million to settle a class action lawsuit by Jeffrey Epstein’s victims, resolving a large part of litigation over the bank’s relationship with the disgraced financier.
Monday’s settlement follows months of embarrassing disclosures that JPMorgan ignored internal warnings and overlooked red flags about Epstein because he had been a valuable client.
Epstein was a JPMorgan client from 1998 to 2013 and was kept on even after being arrested in 2006 on prostitution-related charges and pleading guilty two years later.
Monday’s accord would resolve claims against the largest U.S. bank by potentially more than 100 victims.
Epstein killed himself at age 66 in a Manhattan jail cell in August 2019 while awaiting trial on sex trafficking charges.
“It could be that the bank doesn’t want this to stay in the press,” said Carliss Chatman, a professor at Washington and Lee University School of Law in Virginia.
“At a time Americans are questioning the banking system, associating Chase with human trafficking is not good for business.”
Davia Temin, chief executive of crisis management firm Temin and Co, said settling rather than fighting to the end sends “the right message across Wall Street.”
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