FINRA Came Down on a JP Morgan Securities Unit - The Industry Spread

Michael Volpe

After spending a decade in finance, Michael Volpe has been a freelance investigative journalist since 2009. His work has been published locally in the Chicago Reader, Chicago Crusader, Chicago Heights Patch, and New City. Nationally, Volpe's work has appeared in a wide variety of publications including the Washington Examiner, the Daily Caller, Crime Magazine, the Southern Christian Leadership Conference Newsletter, and Counter Punch. Volpe has been recognized by whistleblowers as leading the charge in getting their stories out. His first book Prosecutors Gone Wild was published in October 2012, his second book The Definitive Dossier of PTSD in Whistleblowers was published in February 2013 and his third book Bullied to Death was published in August 2015.

FINRA

FINRA Came Down on a JP Morgan Securities Unit

September 23, 2019

FINRAFINRA today announced it has censured and fined JP Morgan Securities LLC (JPMS) $1.1 million for failing to timely disclose 89 internal reviews or allegations of misconduct by its registered representatives and associated persons spanning a six-year period. FINRA also required an undertaking by the firm to certify within 60 days that it has taken appropriate corrective measures,” the release stated. 

The release continued, “FINRA found that from January 2012 to April 2018, JPMS failed to disclose, or timely disclose, 89 internal reviews or allegations of misconduct by its registered representatives and associated persons, including misappropriation of customer and company funds, borrowing from customers, forgery or falsification or alteration of documents, unauthorized trading, making unsuitable recommendations, structuring and other suspicious activity. When JPMS eventually filed the required information with FINRA, it was, on average, more than two years late. This prevented or delayed FINRA, other regulators, member firms, and the public from learning about the allegations. JPMS’ delays prevented FINRA from pursuing potential disciplinary action against 30 former JPMS representatives over whom FINRA’s jurisdiction expired before JPMS disclosed the allegations. These failures resulted primarily from the firm’s failure to establish and maintain reasonably designed written supervisory procedures and supervisory systems to identify all instances when Form U5 disclosures were necessary.”

Susan Schroeder, Executive Vice President of FINRA’s Department of Enforcement, said, “FINRA member firms have a responsibility to their fellow member firms, to FINRA and other regulators, and to the investing public to disclose allegations of serious misconduct by their registered representatives. Firms must live up to their responsibility as a gatekeeper and disclose allegations in a timely, accurate and complete manner. This disclosure responsibility is essential to providing transparency and maintaining the integrity of our industry.”

The complaint explained further

“For example, the Firm (JP Morgan Securities) failed to disclose, or timely disclose, internal reviews about and allegations that 13 registered representatives misappropriated funds from banking customers and five registered representatives misappropriated company funds. Additional allegations included that registered representatives engaged in structuring or other suspicious activity, falsified, forged, or altered bank related documents, engaged in unauthorized trading, made unsuitable recommendations, engaged in selling away or undisclosed outside business activities and borrowed from customers.”

FINRA is a self-regulatory organization. It formed in 2007 when the regulatory arms of the NYSE and the NASD merged. Its rules are under the purview of the Securities and Exchange Commission, meaning the SEC must approve all its rules and regulations. It does however have autonomy to license and sanction its member firms. 

According to the complaint, JP Morgan Securities has been a member firm since 1936. 

Login To MyTis Comment Or Register to MyTIS

Leave a Reply

avatar
  Subscribe  
Notify of

Newsletter

Register now to receive the latest news and information for global trading industry.

Latest Articles

CFTC Charges New Mexico Resident with Fraud in Long-Running Ponzi Scheme

Washington, DC –CFTC Charges New Mexico Resident with Fraud in Long-Running Ponzi Scheme.  The U.S. Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the …