--- title: JPMorgan Is in $307 Million Worth of Trouble for Conflicts of Interest description: The bank didn't tell its clients it was favoring its own, more expensive, investments. authors: - name: Ethan Wolff-Mann url: https://money.com/author/ethan-wolff-mann/ at_money_since: 2015 articles: 160 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Personal Finance - Professional Services - Shopping - Taxes - Technology social: - https://x.com/ewolffmann former_staff: true published: '2015-12-18T20:18:28.000Z' modified: '2024-04-16T09:28:17.000Z' section: Banking tags: - conflicts of interst - fiduciary rule - fines - penalty - pubdesk word_count: 325 canonical: https://money.com/jpmorgan-conflict-of-interest-settlement/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![151218_inv_jpmorgan](https://img.money.com/2015/12/151218_inv_jpmorgan.jpg) JPMorgan Chase is in trouble—to the tune of over $300 million for not adequately disclosing significant conflicts of interest to clients. The company failed to call attention to the fact that two of its large wealth-management divisions favor investing in their own products, which are more expensive, [Bloomberg reports](http://www.bloomberg.com/news/articles/2015-12-18/jpmorgan-pays-267-million-to-settle-conflict-of-interest-claims). It also dabbled in third party hedge-funds that made payments back to JPMorgan. The degree of favoritism was high: The SEC said 47% of mutual fund assets and 35% of hedge fund assets were invested in its own products at one point in 2011. In addition to a fat $267 million penalty to the SEC, the bank is also paying an additional $40 million to settle a similar probe by the U.S. Commodity Futures Trading Commission. “Firms have an obligation to communicate all conflicts so a client can fairly judge the investment advice they are receiving,” said Andrew J. Ceresney, Director of the SEC Enforcement Division in a press release on Friday. “These J.P. Morgan subsidiaries failed to disclose that they preferred to invest client money in firm-managed mutual funds and hedge funds, and clients were denied all the facts to determine why investment decisions were being made by their investment advisers.” This scandal comes at the same time the U.S. is debating imposing a fiduciary rule on many advisers, that could cost that industry a few billions, because it would force advisers to stop choosing investments that would pay them more. Essentially, they'd have to invest the money like they would their own. In JPMorgan's case, the issue was an *illegal* lack of disclosure of conflicts of interest. But even when there are disclosures, that may not be enough for many lawmakers, consumer groups, and essentially everyone but the big banks. People like [Elizabeth Warren](https://money.com/warren-attacks-perks-for-advisers/) and the White House have called them out as being far too lax, and the [White House says](https://www.whitehouse.gov/sites/default/files/docs/cea_coi_report_final.pdf) conflicts of interest in wealth management costs retirees $17 billion every year. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/jpmorgan-conflict-of-interest-settlement/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Banking", "item": "https://money.com/banking/" }, { "@type": "ListItem", "position": 3, "name": "Banks", "item": "https://money.com/banks/" }, { "@type": "ListItem", "position": 4, "name": "JPMorgan Is in $307 Million Worth of Trouble for Conflicts of Interest" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/jpmorgan-conflict-of-interest-settlement/#webpage", "url": "https://money.com/jpmorgan-conflict-of-interest-settlement/", "name": "JPMorgan Is in $307 Million Worth of Trouble for Conflicts of Interest", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2015-12-18T20:18:28.000Z", "mainEntity": { "@id": "https://money.com/jpmorgan-conflict-of-interest-settlement/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/jpmorgan-conflict-of-interest-settlement/#breadcrumb" }, "dateModified": "2024-04-16T09:28:17.000Z" }, { "@type": "Article", "headline": "JPMorgan Is in $307 Million Worth of Trouble for Conflicts of Interest", "articleSection": "Banking", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2015/12/151218_inv_jpmorgan.jpg", "width": 2100, "height": 1384, "caption": "151218_inv_jpmorgan" } ], "author": [ { "@type": "Person", "name": "Ethan Wolff-Mann", "url": "https://money.com/author/ethan-wolff-mann/", "@id": "https://money.com/author/ethan-wolff-mann/#author", "sameAs": [ "https://x.com/ewolffmann" ] } ], "publisher": "https://money.com/#organization", "datePublished": "2015-12-18T20:18:28.000Z", "description": "The bank didn't tell its clients it was favoring its own, more expensive, investments.", "abstract": "The bank didn't tell its clients it was favoring its own, more expensive, investments.", "@id": "https://money.com/jpmorgan-conflict-of-interest-settlement/", "inLanguage": "en-US", "dateModified": "2024-04-16T09:28:17.000Z", "wordCount": 325, "keywords": [ "conflicts of interst", "fiduciary rule", "fines", "penalty", "pubdesk" ], "about": [ { "@type": "Thing", "name": "Bank", "sameAs": [ "https://en.wikipedia.org/wiki/Bank" ] } ] } ] } ```