Summary
JPMorgan Chase & Co. (JPM) announced on May 20, 2015, that it has reached separate settlement agreements with the U.S. Department of Justice (DOJ) and the Board of Governors of the Federal Reserve System (Federal Reserve) to resolve investigations into its foreign exchange (FX) business. This resolves a significant overhang for investors, particularly regarding the DOJ settlement where the firm will plead guilty to a single federal antitrust law violation and pay a $550 million fine. The Federal Reserve settlement includes a $342 million fine and requires the firm to implement various remedial actions. Crucially, regulatory bodies have granted necessary waivers to allow JPM to continue its operations. The U.S. Securities and Exchange Commission (SEC) issued three waivers, including one under the Investment Company Act, permitting JPM to continue its roles as an investment adviser and sub-adviser for U.S. mutual funds and exchange-traded funds. The firm is also pursuing a Qualified Professional Asset Manager (QPAM) status with the U.S. Department of Labor. While these settlements address major regulatory issues, investors should note that other FX-related investigations and civil litigation remain ongoing, and the firm continues to cooperate.
Key Highlights
- 1JPM reached settlement agreements with the DOJ and the Federal Reserve resolving investigations into its FX business.
- 2The DOJ settlement requires JPM to plead guilty to a federal antitrust violation and pay a $550 million fine.
- 3The Federal Reserve settlement requires JPM to pay a $342 million fine and undertake remedial actions.
- 4The SEC granted three waivers, allowing JPM to continue as an investment adviser and sub-adviser for U.S. mutual funds and ETFs.
- 5JPM is in the process of applying to the Department of Labor to maintain its Qualified Professional Asset Manager (QPAM) status.
- 6Other FX-related investigations and civil litigation involving JPM are still ongoing.
- 7JPM continues to cooperate with various ongoing investigations.