JPMorgan fined $367 mn on conflicts of interest
US regulators fined JPMorgan Chase $367 million Friday for failing to disclose conflicts of interests to clients when it recommended proprietary investment products over third-party options.
From 2008-2013, JPMorgan failed to make clear to investment clients numerous conflicts of interests, including its preference for JPMorgan-managed mutual funds over other funds, according to the US Securities and Exchange Commission (SEC.
JPMorgan also did not tell investors that some JPMorgan-managed mutual funds offered a less expensive share class than the one recommended, which meant higher revenues for the JPMorgan affiliate.
JPMorgan also did not tell clients that they were being steered to third-party-managed hedge funds that shared management or performance fees with JPMorgan, regulators said.
JPMorgan admitted wrongdoing and agreed to pay the SEC $267 million in fines and disgorgement, the SEC said. JPMorgan will pay an additional $100 million to the Commodities Futures Trading Commission in a parallel order.
"Clients are entitled to know whether their adviser has competing interests that might cause it to render self-interested investment advice," said Julie Riewe, co-chief of the SEC enforcement division's asset management unit.
Shares of JPMorgan were down 1.9 percent at $65.02 in early afternoon trade.