JP Morgan has been fined $4 million by the SEC for deleting around 47 million emails from 2018 that were supposed to be kept according to the Securities Exchange Act of 1934.
The erased emails contained critical business information, and their removal prevented JP Morgan from providing proof demanded by the SEC and other agencies.
JP Morgan found the problem in October 2019 and reported it to the Securities and Exchange Commission in January 2020. Following an inquiry, the SEC determined that JP Morgan had intentionally violated Exchange Act Section 17(a) and Rule 17a-4(b)(4), and has been fined $4 million.
According to JP Morgan, it all started when it sought to delete outdated conversations and documents. While doing so, it claimed to have taken safeguards such as attaching unique codes to specific mailboxes to avoid destroying vital papers. However, the deletion jobs failed in June 2019, prompting troubleshooting. Only the emails protected by the unique codes were eventually saved from being permanently deleted.
JP Morgan blames the problem on an archiving provider, stating the firm pledged to respect the Exchange Act’s retention standards. It also published a statement reiterating its commitment to record-keeping duties and emphasizing the enhancements made to its systems and procedures.
The sources for this piece include an article in TheRegister.