JPMorgan Agrees to $250M Fine for Lacking Fiduciary Controls

JPMorgan agreed to a $250 million fine for 'deficient risk management practices and an insufficient framework for avoiding conflicts of interest.'
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JPMorgan Chase  (JPM) - Get Report agreed to pay a $250 million penalty to settle charges by the Office of the Comptroller of the Currency that it didn’t properly control its fiduciary business.

“For several years, the bank maintained a weak management and control framework for its fiduciary activities and had an insufficient audit program for, and inadequate internal controls over, those activities,” the OCC said in the consent order.

“Among other things, the bank had deficient risk management practices and an insufficient framework for avoiding conflicts of interest."

JPMorgan will pay its penalty to the U.S. Treasury, the OCC said.

As for JPMorgan’s reaction, “we are committed to delivering best-in-class controls across our business, and we have invested significantly in and enhanced our controls platform over the last several years to address the issues identified,” JPMorgan spokesman Darin Oduyoye told Bloomberg.

JPMorgan’s stock recently traded at $122.52, up 3.7%. It has fallen 12% year to date, but it has jumped 32% since Sept. 23. The S&P 500 has climbed 11% year to date.

TheStreet.com Founder Jim Cramer said last month that he didn't see a lot of growth in JPMorgan. 

"They're doing well. They've got the fortress balance sheet. They're without a doubt the best bank. I don’t mind owning it,” he said. 

“But I think they're not going to have anything near what Goldman Sachs  (GS) - Get Report has. Goldman is a trading operation."

Morningstar analyst Eric Compton puts fair value at $112 for JPMorgan.