FINRA Sanctions J.P. Morgan Securities for Failure to Disclose Broker Misconduct
According to a press announcement, on September 16, 2019, the Financial Industry Regulatory Authority (FINRA) reportedly fined J.P. Morgan Securities $1.1 million for allegedly failing to disclose broker misconduct in a timely manner.
From January 2012 to April 2018, FINRA found 89 instances where J.P. Morgan Securities allegedly failed to meet the regulator’s deadline to disclose when a registered representative did things like misappropriate funds, borrow from customers, forge or falsify documents, make unauthorized trades or recommendations, or engage in other suspicious activity. Apparently, sometimes J.P. Morgan didn’t file a disclosure at all, according to FINRA’s allegations.
FINRA claims that when J.P. Morgan Securities did file the required information, it was purported to be two years late, on average.
FINRA rules require that broker-dealers inform FINRA within 30 days of terminating a registered rep of any allegations of fraud, wrongful taking of property or violation of industry rules and regulations.
By delaying the filing, the regulator further alleges J.P. Morgan Securities prevented FINRA from pursuing disciplinary action against 30 former brokers.
The regulator reportedly is also requiring the firm to certify within 60 days that it has taken appropriate corrective measures, in addition to the $1.1 million fine.
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