CFTC Orders J.P. Morgan to Pay $850,000 for Swap Reporting Failures

Washington, D.C. — The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, and J.P. Morgan Securities, plc (collectively, J.P. Morgan), provisionally registered swap dealers, for failing to comply with their reporting obligations as swap dealers. The order requires J.P. Morgan to pay an $850,000 civil monetary penalty and to cease and desist from any further violations of the Commodity Exchange Act (CEA) or CFTC regulations, as charged.

“Timely and accurate reporting of swaps transactions by registered swaps dealers is critical to the CFTC’s mission to protect market participants and ensure market transparency and integrity,” said CFTC Acting Director of Enforcement Gretchen Lowe.

Case Background

The order specifically finds that, from September 2015 to February 2020, J.P. Morgan failed to report approximately 2.1 million short-dated foreign exchange (FX) swap transactions. These unreported short-dated FX swap transactions represented approximately fifty-one percent of the total number of FX swaps that J.P. Morgan executed during that same period. 

Short-dated FX swaps are transactions in which the parties exchange two currencies the day after execution and then reverse that exchange at a predetermined rate on the following business day. A short-dated FX swap is a reportable FX swap transaction because it involves an exchange of currencies and a reversal of that exchange on specific dates and at rates fixed at the inception of the contract. Consequently, J.P. Morgan was obligated to report its short-dated FX swaps under the relevant statutory and regulatory provisions, which it failed to do during the relevant period.

 J.P. Morgan has represented that it has reported all of the previously-unreported FX swaps transactions it was obligated to report. 

The Division of Enforcement staff responsible for this case are Brett Shanks, Jennifer Chapin, Lauren Fulks, Tom Simek, Christopher Reed, and Charles Marvine, as well as former staff member Jo Mettenburg.

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Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.