SEC Censures JPMorgan for Unauthorized Disqualified Trader Activity

JPMorgan Chase Bank and its affiliate, J.P. Morgan Securities, were censured by the Securities and Exchange Commission (SEC) for allowing a statutorily disqualified trader to engage in security-based swap (SBS) transactions before receiving proper authorization.

The SEC’s order, issued on October 2, 2026, revealed that the firms were aware the trader was disqualified but lacked adequate systems to prevent him from trading. The trader had been fined by the U.K. Financial Services Authority in 2011 for failing to report suspicious transactions, which resulted in a statutory disqualification under Exchange Act Section 3(a)(39)(F).

Between the end of 2021 and early 2024, the trader personally executed 100 SBS transactions and supervised 700 others. The SEC granted permission for him to trade in March 2024, but JPMorgan later discovered he had already been trading without approval. The firms self-reported the violation and implemented a system to detect such violations, which the SEC took into account during settlement.

The resulting order censures the firms and orders them to cease and desist from future violations of Exchange Act Sections 15F(b)(6) and 15F(h) and Rule 15Fh-3(h)(1). No monetary sanctions were imposed.