(Reuters) – JPMorgan’s Australian unit was fined A$775,000 ($509,252.50) for allowing suspicious client orders to trade wheat futures intended to manipulate the market, the country’s corporate regulator said on Thursday.
The Australian Securities and Investments Commission (ASIC) said it found JP Morgan Securities’ failure to identify suspicious transactions was “negligent” and that it should have acted more quickly when the regulator flagged the transactions.
Farmers are using contracts to manage fluctuations in wheat prices, which could affect what Australians pay at the checkout, the regulator said in a statement.
“JPMSAL (JP Morgan Securities) has resolved this matter,” a JPMorgan spokesman told Reuters.
JPMorgan did not dispute the charges brought against it and paid the fine, the regulator said.
It was found that the company failed to detect 36 orders for Eastern Australian wheat futures between January 11 and March 3, 2022, which were placed for the purpose of market manipulation.
The orders were executed “close to the end of the trading session to affect the daily settlement price of the derivative contract,” the regulator said.
“Behavior like this has real consequences, which is why tackling manipulation in the energy and commodity derivatives markets is ASIC’s priority,” ASIC deputy chair Sarah Court said.
($1 = 1.5200 Australian dollars)