What Did JPMorgan Do To Prompt This Probe?
No monetary penalty is expected, but as Reuters reported on Friday, JPMorgan Chase (NYSE:JPM) will likely be issued a cease-and-desist order for compliance weakness by the Office of the Comptroller of the Currency and the Federal Reserve. While official action may come as soon as Friday, the status of the inquiry could change and the order could be postponed a week, sources told the publication.
The expected order is the result of an investigation into the bank’s lapses in how it polices money flow from suspect sources. U.S. regulators have increased their efforts over the past 12 months to make banks improve their anti-money-laundering systems, which are supposed to catch transactions from sanction countries like Iran or from customers involved in drug trafficking or terrorism.
In this particular case, the Treasury Department’s Financial Crimes Enforcement Network may look into the bank’s practices as well.
Government agencies have taken similar actions with the British bank Standard Charter (SCBFF.PK) and Citigroup (NYSE:C). Although Citigroup was not required to pay any penalties, Standard paid a fine of $667 million to resolve an anti-money-laundering probe.
A JPMorgan spokeswoman declined to comment to Reuters regarding the investigation.