JPMorgan Fined $2.4 Million for Overcharging Private Banking Clients

The Monetary Authority of Singapore (MAS) has handed JPMorgan Chase Bank, N.A. (JPM) a $2.4 million civil penalty. The fine comes after regulators uncovered a series of missteps by the bank’s relationship managers (RMs), who misrepresented fees during over-the-counter (OTC) bond transactions, leaving clients unknowingly overcharged.

The misconduct stems from 24 transactions between November 2018 and September 2019, where RMs charged spreads above the agreed rates, exploiting their clients’ reliance on their expertise. Without direct access to interbank pricing, clients trusted the RMs’ word, only to be misled by omissions and inaccurate disclosures.

MAS’s investigation exposed cracks in JPMorgan’s internal controls, which failed to prevent or detect the misconduct. Specifically, the bank lacked adequate safeguards to ensure its RMs adhered to pre-agreed spreads when executing trades on behalf of clients. The regulator found that in some cases, RMs outright misrepresented price components—such as spreads or interbank prices—while in others, they omitted critical information that would have revealed the overcharging.

This contravened Singapore’s Securities and Futures Act (SFA), which mandates honesty and full transparency in capital markets transactions. Sections 201(c) and 201(d) of the law explicitly prohibit making false statements or withholding material facts, both of which were breached during these transactions.

Accountability & Restitution
In response, JPMorgan admitted its failings under section 236C of the SFA, which holds corporations liable for failing to prevent or detect employee misconduct linked to negligence. The bank has since refunded overcharged clients and paid the $2.4 million penalty. It has also implemented significant upgrades to its pricing frameworks and internal controls to prevent a repeat of these issues.

Separate investigations into the RMs directly involved are ongoing, leaving the door open for further disciplinary action.

It’s worth noting that civil penalties in Singapore are not criminal in nature. Introduced in 2004, the regime aims to balance enforcement with flexibility, targeting financial misconduct without necessarily resorting to criminal charges. Penalties can range from a minimum of $100,000 for corporations to three times the profit gained or loss avoided through violations.

What This Means for the Industry
MAS’s action against JPMorgan sends a clear signal to private banks that trust is a currency that cannot be squandered. With clients relying on their relationship managers for accurate information, any lapse—intentional or otherwise—undermines the integrity of the financial ecosystem.

For JPMorgan, the case is a reputational stumble but also a lesson learned. By refunding affected clients and enhancing its controls, the bank has taken steps to rebuild trust. Yet, this enforcement also serves as a cautionary tale for the broader industry, emphasizing that robust compliance systems are not optional but essential safeguards.

As MAS continues its review of pricing and disclosure practices across private banking, the message is clear that fairness and transparency aren’t just regulatory requirements—they’re foundational to client relationships.

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