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Exclusive-JPMorgan to restrict trading of U.S. cannabis stocks -letter -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/File Photo

Written by Shariq Khan and Matt Scuffham

(Reuters) – JPMorgan Chase & Co (NYSE:) has told prime brokerage clients it will no longer let them buy U.S. cannabis-related securities beginning Nov. 8, according to a letter seen by Reuters.

Similar actions were taken by prime brokerages such as Credit Suisse (SIX-), designed to lower regulatory risks after the fallout of the highly publicized collapses at Archegos Capital Management Management & Greensill Capital earlier this year.

Even though cannabis is legal in many states, it remains illegal according to U.S. federal laws. For investment banks who work for drug-producing or trading companies, this poses a significant legal risk.

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