May 13, 2024

JPMorgan Australia fined for allowing suspicious trades in wheat futures

JPMorgan's Australian division faced a fine of AUD 775,000 (US$509,200) for permitting the placement of suspicious client orders on wheat futures trading, aimed at manipulating the market, revealed Australia’s corporate regulator, Reuters reported.

According to the Australian Securities and Investments Commission (ASIC), JPMorgan Securities' failure to recognize the dubious trades was deemed "careless." The regulator emphasized that the company should have taken prompt action upon being alerted to the transactions.

The contracts in question are utilised by farmers to navigate fluctuations in wheat prices, which can impact consumer prices at the retail level, stated the regulator in a released statement.

JPMorgan did not challenge the accusations levelled against it and promptly paid the imposed penalty, confirmed the regulator.

The investigation revealed that the company overlooked 36 orders on the Eastern Australia Wheat futures between January 11 and March 3, 2022, which were placed with the intention of manipulating the market.

These orders were executed "close to the end of a trading session to influence the daily settlement price of a derivative contract," outlined the regulator.

-      Reuters