JPMorgan’s Australian securities arm has been fined A$775,000 ($509,252.50) by the Australian Securities and Investments Commission (ASIC) for its failure to stop suspicious client orders on wheat futures, which were believed to be aimed at manipulating the market. The orders in question occurred over a period spanning from January 11 to March 3, 2022, and involved 36 orders on the Eastern Australia Wheat futures that were executed close to the end of trading sessions, with the intent of influencing the daily settlement price of a derivative contract.
Farmers, who depend on such futures contracts to manage the risk associated with fluctuating wheat prices, felt the potential impact of these activities, which also could affect everyday Australians at the checkout. The regulator’s probe into the trades described J.P. Morgan Securities’ oversight as “careless” and underscored the need for swifter action when such suspicious activities are flagged.
ASIC Deputy Chair Sarah Court emphasized the significance of curbing market manipulation, stating, “There are real-world consequences for this sort of behavior, which is why tackling manipulation in energy and commodities derivatives markets has been an ASIC priority.” The Australian watchdog’s pursuit of such violations underlines their commitment to ensuring market integrity and protecting participants from unfair trading practices.
JPMorgan, for its part, did not challenge the allegations raised by the ASIC and promptly settled the penalty. “JPMSAL (J.P. Morgan Securities) has resolved this matter,” a spokesperson for the firm communicated, signaling cooperation with the regulatory body.
Relevant articles:
– JPMorgan’s Australia arm fined $509,000 for allowing suspicious client orders, Yahoo Canada Finance, 05/09/2024