SEC fines JPMorgan subsidiary for deleting 47 million emails, some related to subpoenas

by | Jun 22, 2023 | Financial

The Securities and Exchange Commission fined the broker-dealer subsidiary of JPMorgan Chase $4 million for accidentally deleting about 47 million emails from early 2018, according to an administrative order Thursday.Some of those deleted emails were sought by subpoenas in at least a dozen regulatory investigations, but could no longer be retrieved, the SEC order against J.P. Morgan Securities LLC noted.Others “could relate to potential future investigations, legal matters and regulatory inquiries,” the order said.The emails, which were accidentally deleted in 2019, were from and to about 8,700 email boxes, which included those of up to 7,500 employees who had regular contact with Chase customers.Many of the emails were “business records required to be retained pursuant” to federal securities law, the order said.J.P. Morgan Securities consented to the SEC sanction, which also censured the firm.The firm had submitted a settlement offer in anticipation of administrative proceedings related to the deletions, and the SEC accepted that offer.The SEC also ordered the firm to “cease and desist from committing any future violations” of the securities law requiring broker-dealers to retain for at least three years the originals of all communications.This is the third time the investment advisor has agreed to punishment for failing to preserve electronic records.The firm in late 2021 agreed to pay $125 million in penalties for failing to preserve text messages and other electronic communications sent between January 2018 and November 2020.In 2005, the firm paid $700,000 in penalties for not preserving electronic records from mid-1999 to mid-2002.JPMorgan spokeswoman Patricia Wexler declined to comment on the latest sanction.In its order Thursday, the SEC noted JPMorgan in 2016 began a project “to delete from its system older communications and documents no longer required to be retained.”Those messages included old emails, instant messages and communications sent over the Bloomberg terminal service.But there were “glitches” in the project, “with the identified documents not, in fact, being expunged,” the order said.While troubleshooting that issue in June 2019, employees of the firm “executed deletion tasks on electronic communications from the first quarter of 2018,” the order said.Those …

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