J.P. Morgan Chase
Securities and Exchange Commission
is investigating possible accounting and disclosure rule violations in connection with the firm's bond-paying agency.
In an annual regulatory filing made today, J.P. Morgan Chase said the SEC was investigating whether there were "violations of its transfer agency recordkeeping or reporting regulations and whether JPMorgan Chase's disclosure regarding these issues was adequate and timely."
The questions are connected to the bond paying agency within the bank's Institutional Trust Services group, which offers corporate trust and transaction management services including international securities clearing and ADR services. The investor services and institutional trust businesses helped fuel a 12% increase in the bank's treasury and security services business last year.
A J.P. Morgan spokesman said the investigation had been disclosed as early as the 1999 annual report, adding that it has been well over a year since the initial disclosure was made.
In the report, the bank said the conditions related to the allegation have since been addressed and also said it is in talks with the SEC in hope of resolving the investigation on a "mutually acceptable basis." The stock was lately down $1.50 to $38.72.