‘Accidentally’ Deleting Evidence Costs JP Morgan Millions in Fines

The Securities and Exchange Commission is not happy with JP Morgan for accidentally deleting millions of emails related to it’s Chase Bank subsidiary.

The company deleted something on the order of 47 million electronic communications records from almost 9,000 mailboxes covering the period January 1 to April 23, 2018.

Many of these records were required to be retained.

But even if you are not required to retain records under the Securities Exchange Act, there are lots of other regulations that may require you to preserve records.

For most of us, one retention requirement is when you are a party to a lawsuit.

Of course JP Morgan blamed the vendor that they hired, they managed and they vetted. How come companies try to blame the companies that they picked when things go wrong? The vendor supposedly told both JP Morgan and FINRA that they were complying with all relevant regulations.

The feds don’t care. JP Morgan is both responsible and liable.

If you don’t consider a conspiracy theory that maybe these communications were problematic for Chase, then you can assume that the vendor was poorly managed.

Apparently, Chase and the vendor developed procedures to delete the correct documents. And supposedly tested it. That process did not work.

JP Morgan now gets to pay a $4 million fine.

The moral of the story is that records retention is an important responsibility and it must be done correctly. And, don’t think you can get away with blaming the vendor that you picked and managed if things go wrong. If you need help with this, please contact us.

Credit: The Register

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