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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRegulator fines JPMorgan Chase $250 million
Nov. 24 (UPI) -- A federal bureau in the U.S. Treasury Department fined JPMorgan Chase Bank $250 million in a civil penalty Tuesday for failure to maintain adequate internal controls.
The Office of the Comptroller of the Currency said it found JPMorgan Chase's risk management practices were deficient and it lacked a sufficient framework to avoid conflicts of interest.
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"For several years, the bank maintained a weak management and control framework for its fiduciary activities and had an insufficient audit program for, and inadequate internal controls over, those activities," the office said in its consent order.
"Among other things, the bank had deficient risk management practices and an insufficient framework for avoiding conflicts of interest. As a result of the foregoing misconduct, the bank violated 12 C.F.R. 9.9 and engaged in unsafe or unsound practices that were part of a pattern of misconduct," the order said.
Read more: https://www.upi.com/Top_News/US/2020/11/24/Regulator-fines-JPMorgan-Chase-250-million/2201606240600/
ProfessorGAC
(64,995 posts)I was on the board of a community bank for 20 years. That kind of behavior would have gotten the president and VP fired, and the 4 officers (of which I was one) kicked off the board.
Apparently it's ok for a while when they're 15,000 times bigger than my bank.
This fine is 0.0077% of their assets! Not much for egregious behavior.
If they're too big to fail, they're too damned big.
Buckeyeblue
(5,499 posts)My guess is that this fine come from Chase being so big and being involved in so many different lines of business that it essentially the right hand not knowing what the left hand is doing.
It's easier for community banks to keep track of that.
ProfessorGAC
(64,995 posts)If a firm is too big to keep track of everything going on, they're too big, period.
Also, my comparison was related to the penalties.
Did the CEO & CFO get fired? No.
Did the board officers get expelled? No.
But, I can assure you that would have happened at our place.
That fine would have to be $14,000 for our place, and I can also assure it would be at least 75% more than that.
I wasn't comparing the operation. As you said, there's no way to do that. But, the penalties are far from proportional to their size.
When 2 corporate officers & 4 board members get launched over this, I'll reconsider.
Until then, I think they got off very lightly for things any banker knows not to do.
Buckeyeblue
(5,499 posts)The fines are akin to having to buy your friend a coke. The big banks like to talk about risk management. But they aren't willing to spend the money to do it.
I work at a big bank (not Chase). I see this mentality every day.