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SEC fines JPMorgan over irretrievable deletion of 47 million emails
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The Securities and Exchange Commission has fined JPMorgan Chase's broker-dealer subsidiary $4 million for accidentally deleting about 47 million emails.
The SEC's administrative order revealed some deleted emails were relevant to subpoenas in multiple regulatory investigations but could no longer be recovered.
Other emails could have had implications for future investigations, legal matters, and regulatory inquiries.
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The accidental deletion occurred in 2019, affecting around 8,700 email boxes, including those of up to 7,500 employees with regular customer contact at JPMorgan Chase.
Many deleted emails were considered "business records required to be retained" under federal securities law.
JPMorgan Securities, the firm in question, agreed to the SEC's sanctions and was censured.
The SEC ordered the firm to cease any future violations of securities laws which mandate the retention of all communications' originals for a minimum of three years.
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This incident marks the third time JPMorgan has faced penalties for failing to preserve electronic records.
In 2021, the company agreed to pay $125 million in penalties for not preserving text messages and other electronic communications between January 2018 and November 2020.
In 2005 it paid $700,000 in penalties for failing to preserve electronic records from mid-1999 to mid-2002.
The SEC's order noted in 2016, JPMorgan began a project to delete older communications and documents that were no longer required to be retained.
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However, glitches in the project resulted in the unintended deletion of documents.
In June 2019, employees mistakenly executed deletion tasks on electronic communications from the first quarter of 2018 based on inaccurate information provided by the firm's archiving vendor.
These deletions were permanent and affected communications that should have been maintained according to broker-dealer recordkeeping rules.
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These were discovered in October 2019 when a JPMorgan team responsible for producing records related to legal cases noticed missing emails from early 2018.
JPMorgan reported the deletions to the SEC in January 2020.
The order said JPMorgan only informed one of the eight investigative teams at the SEC about the compromised production in response to the subpoenas.
As the deleted communications are irretrievable, the full extent of their impact on regulatory investigations remains unknown.
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