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JPMorgan faces probes of proprietary funds after SEC settlement
[NEW YORK] JPMorgan Chase and Co, the largest US bank by assets, said it faces further investigations into conflicts of interest in the way it sold and used its own investment products.
The firm is cooperating with "inquiries from other government authorities concerning disclosure of conflicts associated with the firm's sale and use of proprietary products," according to a regulatory filing issued Tuesday.
Indiana securities regulators are investigating the bank, according to two people familiar with the matter who asked not to be identified.
They are looking into how JPMorgan handled investments inside trusts that benefited churches in the state, one of the people said. A spokeswoman for Indiana's securities regular didn't immediately respond to a request for comment. Darin Oduyoye, a JPMorgan spokesman, declined to comment.
The bank agreed in December to pay more than US$300 million to resolve allegations by the Securities and Exchange Commission and the US Commodity Futures Trading Commission that it failed to tell customers that it stood to benefit from selling its own investment products.
JPMorgan didn't disclose that it reaped profits by putting client money into mutual funds and hedge funds that generated fees for the company, the SEC said.
JPMorgan admitted disclosure failures from 2008 to 2013 related to two units that manage money - its securities subsidiary and its nationally chartered bank - as part of the SEC settlement. The New York-based firm said at the time that the omissions in its communications were unintentional and that it has since enhanced disclosures.
The bank settled a lawsuit last August accusing it of putting its interests ahead of an historic church in Indiana endowed by descendants of Eli Lilly and mismanaging its trusts. Terms weren't disclosed.