Because of this, JPMorgan could not produce records on 12 cases they received subpoenas on. Penalty? $4 million fine and censure
- These proceedings arise out of the deletion by JPMorgan of approximately 47 million electronic communications in about 8,700 electronic mailboxes relating to the period January 1 through April 23, 2018, many of which were business records required to be retained pursuant Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.
- Beginning in 2016, JPMorgan undertook a project to delete from its system older communications and documents no longer required to be retained. The deletion tasks implemented by JPMorgan employees in connection with the project experienced glitches, with the identified documents not, in fact, being expunged. In June 2019, while troubleshooting the issue, firm employees executed deletion tasks on electronic communications from the first quarter of 2018, erroneously believing, based on written representations from JPMorgan’s archiving vendor, that all the documents were coded in a way to prevent permanent deletion of records still within the thirty-six month regulatory retention period required by Section 17(a) of the Exchange Act and Rule 17a-4(b) thereunder. In fact, however, the vendor did not apply the default retention settings in a particular email domain and those communications, including many required to be maintained pursuant to the broker-dealer recordkeeping rules, were permanently deleted. Thus, approximately 47 million electronic communications of JPMorgan employees in the Chase banking retail group, thousands of whom were registered representatives of JPMorgan, are unrecoverable.
- In at least twelve civil securities-related regulatory investigations, eight of which were conducted by the Commission staff, JPMorgan received subpoenas and document requests for communications which could not be retrieved or produced because they had been deleted permanently.
Oh yeah, remember when JPMorgan:
$4 million fine and censure
JPMorgan screwed up big time. They deleted about 47 million emails from approximately 8,700 mailboxes that they were supposed to keep under Section 17(a) of the Exchange Act and Rule 17a-4(b)(4).
- This deletion wasn't supposed to happen - it was an error during a project started in 2016 to remove older, non-essential documents.
They claim they had a system in place to prevent deletion of records within the mandatory 36-month retention period, thanks to assurances from their archiving vendor.
- But, surprise surprise, the vendor messed up, and a particular email domain didn't have the right settings applied. This led to permanent deletion of a bunch of emails, many of which were legally required to be kept.
- As a result, JPMorgan couldn't produce documents requested in at least twelve regulatory investigations, eight of which were conducted by the SEC, because the emails had been permanently deleted.
- This includes communications related to the Chase banking retail group, involving thousands of JPMorgan employees who were registered representatives.
- Penalty? $4 million fine and censure