JPMorgan will pay a $4 million fine to settle US SEC allegations that the bank mistakenly deleted millions of electronic records

JPMorgan Chase & Co. has agreed to pay a fine of $4 million in order to resolve allegations made by the Securities and Exchange Commission (SEC) regarding the inadvertent deletion of numerous electronic records. These deletions rendered crucial communications inaccessible to regulators in twelve ongoing investigations.

According to the SEC, JPMorgan Securities, during the period from January 2018 to April 2018, permanently erased approximately 47 million electronic records, encompassing emails and instant messages. Consequently, the regulator noted that JPMorgan failed to produce requested documents in eight SEC investigations and four other regulatory inquiries. However, the SEC did not disclose whether these actions specifically targeted the bank.

In a settlement order, the SEC stated, "Because the deleted records are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations."

JPMorgan declined to provide a comment on the matter and did not admit to or deny the allegations made by the regulator.

In a prior incident in 2021, JPMorgan paid $125 million to the SEC and $75 million to the Commodity Futures Trading Commission to resolve allegations that the company violated regulations by failing to retain business communications on platforms like WhatsApp. Subsequently, other banks faced fines for similar misconduct in the following year.

According to the SEC, brokerages such as JPMorgan Securities are obligated to retain records of business communications sent and received for a minimum of three years.

In the settlement reached on Thursday, the SEC claimed that the company mistakenly deleted millions of communications from the first quarter of 2018 while addressing technical issues. The vendor responsible for archiving the bank's records had assured JPMorgan that the records would be safeguarded, according to the SEC.