The Securities and Exchange Commission (SEC) imposed a $4 million fine on JPMorgan Chase after the financial giant acknowledged that it mistakenly deleted around 47 million emails that were addressed to its customers.
According to the SEC, these emails should have been retained for a minimum of three years, as they contained "business records," information related to documents and personal customer data:
Because the deleted records are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations. ... Lost documents could relate to potential future investigations, legal matters and regulatory inquiries.
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The records were deleted in June 2019 from more than 8,700 electronic mailboxes:
These proceedings arise out of the deletion by JPMorgan of approximately 47million electronic communications in about 8,700 electronic mailboxes relating to the period January 1 through April 23, 2018, many of which were business records required to be retained pursuant Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.
Millions of emails erroneously deleted
According to the financial giant, employees "mistakenly" deleted the emails while performing a cleanup of its database. The company's Technology Department indicated that they believed the documents were encrypted to prevent permanent deletion.
The SEC indicated that this is not valid justification, since, despite this, "the provider did not apply the default retention settings on an email domain."
This is the third time JPMorgan Chase has been fined for deleting electronic records. In 2021, it paid $125 million for not preserving text messages and other communications from 2018 and 2020. In 2005, the firm was fined $700,000 for deleting electronic records from 1999 to 2002.
The financial entity assumed responsibility and will pay the corresponding amount.
