SEC Fines JPMorgan $4M for Mistakenly Deleting 47M Emails

Facts

• The US Securities and Exchange Commission (SEC) has fined JPMorgan Chase $4M after the bank accidentally and permanently deleted 47M emails from 8.7K mailboxes belonging to as many as 7.5K employees from its retail banking division.¹
• The emails were dated between January and April 2018 before their deletion in 2019, violating SEC regulations that require the bank to retain emails for 36 months.²
• JPMorgan said the deletions, some of which were emails sought by subpoenas in at least a dozen regulatory investigations, resulted when its corporate compliance technology department, attempting to delete communications from the 1970s and 1980s, brought in help from a third party managing its email storage.¹
• The SEC said the employees in charge of deletion "erroneously" believed — based on claims by the third-party vendor — that the files were coded to ensure those that were required to be stored for three years wouldn't be deleted.³
• JPMorgan, which reported the deletions to the SEC in 2020, also agreed to "cease and desist from committing or causing any violations and any future violations" of the three-year rule.²
• This is the third time JPMorgan has been fined for deleting electronic records; the bank paid $125M in 2021 for not keeping text messages and other electronic communications and $700k for similar violations in 2005.³

Sources: ¹Reuters, ²CNN, and ³CNBC.

Narratives

• Establishment-critical narrative, as provided by Duke University School of Law. Despite regulations on banks supposedly getting tighter, the world's leading financial institutions are growing more and more bold in their illegal behavior. The reasons for this are plenty, but two are the most important: first, the fines they pay don't put a dent in their portfolio, and second, they benefit from their friends from the industry becoming the regulators. Banking is a complex industry, but the government must close these loopholes and actually impose severe penalties.
• Pro-establishment narrative, as provided by Insider Intelligence. While some fines certainly do seem small, the US government, over the past year, has imposed record-breaking fines on the world's biggest banks. For example, Barclays, Bank of America, and Goldman Sacks, among others, each paid a whopping $125M for violating record-keeping laws. Furthermore, the government has stayed ahead of the curve by monitoring the use of new communication technology so these financial behemoths can't skirt the law.