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October 27, 2015

SEC Takes Tougher Stance on Enforcement in J.P. Morgan Case

“Federal regulators want to restrict J.P. Morgan Chase & Co.’s ability to raise funds for clients, in an effort to impose a broader range of consequences on financial firms accused of breaking the rules, according to people familiar with the matter.

“J.P. Morgan has already agreed to pay more than $200 million to resolve allegations by the Securities and Exchange Commission and other regulators that it didn’t make proper disclosures when touting its own investment products to clients over those offered by its competitors, the people said. But the settlement has been held up for several weeks by the SEC’s demands that J.P. Morgan also accept limits on its ability to sell stock or bonds via private placements for several years, the people said.

“The demand could limit the ability of J.P. Morgan’s private bank to raise money for clients like hedge funds through a key channel, selling stocks or bonds privately to sophisticated investors, including wealthy individuals. The move comes as the agency has been criticized by some Democrats and liberal activists for not using all its powers to police Wall Street.”

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Read the full wall Street Journal article by Aruna Viswanatha and Emily Glazer here.

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