JPMorgan Trust Bank has fallen foul of Japanese regulators for activities related to its real estate trust group. The Financial Service Agency has suspended the bank from generating new business by its real estate trusts for six months, and ordered it to submit a plan detailing its efforts to improve internal systems, governance and compliance.

A routine FSA inspection revealed that JPMorgan had not sufficiently investigated or assessed the underlying assets included in real estate securitization products. Specifically, the regulator found sites to be in breach of construction rules, overvalued, and unfit for liquidation or development.

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