JPMorgan Chase & Co. JPM was penalized by the Commodity Futures Trading Commission (“CFTC”) for failing to submit accurate large trader reports (“LTRs”) for physical commodity swap positions. The bank will have to pay $225,000 in civil fine to settle the charges against JPMorgan Ventures Energy Corp. and JPMorgan Chase Bank, N.A.
According to the CFTC’s statement, large trader reporting for physical commodity swaps is essential to its ability to conduct effective surveillance of markets in the U.S. physical commodity futures and economically equivalent swaps.
However, it was found that JPMorgan routinely filed reports that contained errors from Mar 2013 through Apr 2014. These errors included reporting the underlying commodity, futures equivalent months, currency value strike price in the wrong data fields and reporting futures contract equivalents, commodity units, and notional values that were incorrect or missing.
Also, errors like providing identifying information for principals that attributed positions to the wrong entities and incorrectly reporting counterparty names were found by CFTC. Moreover, JPMorgan failed to submit LTRs on two days.
While JPMorgan consented to the order without admitting or denying the regulator’s findings, the CFTC acknowledged that the company made modifications to data processing and reporting systems as necessary to comply with LTR reporting requirements, corrected errors when identified and submitted corrected historical LTRs.
Previously, in 2014, JPMorgan had reached a $650,000 settlement with the CFTC to resolve the claims of filing falsified reports on the trading positions of some of its large traders.
Currently, JPMorgan carries a Zacks Rank #5 (Strong Sell). Some better-ranked banks include BofI Holding, Inc. BOFI, Northrim Bancorp Inc. NRIM and Western Alliance Bancorporation WAL. All these stocks hold a Zacks Rank #2 (Buy).
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