J.P. Morgan Securities LLC, a wholly-owned subsidiary of JPMorgan Chase & Co. (NYSE:JPM), has agreed to pay a total penalty of $200 million to the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC).
Following the news, shares of the financial services provider declined 2.3% on Friday.
Settlement Details
The settlement relates to the civil investigations of JPMS’ compliance with records preservation requirements applicable to broker-dealer firms, swap dealers and futures commission merchants.
The regulators said it discovered that JPMS failed to adequately maintain some communications required under their respective record-keeping rules. Further, certain supervision lapses were also noticed by the SEC and CFTC.
While CFTC will receive a civil monetary penalty of $75 million, a $125 million penalty will be paid to SEC.
Wall Street’s Take
UBS analyst Erika Najarian initiated a Buy rating on the stock and raised the price target to $210 from $149. This implies 34% upside potential to current levels.
The rest of the Street is cautiously optimistic about JPMorgan and has a Moderate Buy consensus rating based on 11 Buys, 2 Holds and 2 Sells. The average JPMorgan price target of $179.29 implies 14.4% upside potential.
Hedge Fund Trading Activity
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in JPMorgan is currently Very Negative, as the cumulative change in holdings across all 28 hedge funds that were active in the last quarter was a decrease of 1.7 million shares.
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