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FINRA hits J.P. Morgan Securities with $2.8M fine


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FINRA hits J.P. Morgan Securities with $2.8M fine

The Financial Industry Regulatory Authority has fined J.P. Morgan Securities LLC $2.8 million over alleged violations of the SEC's customer protection rule.

The regulator found that J.P. Morgan Clearing Corp., of which J.P. Morgan Securities is the successor, did not have reasonable processes in place to ensure customer securities were kept segregated and therefore free of encumbrance and not used for the bank's own purposes. The failure, attributed to legacy systems' design flaws and data errors, is said to have resulted in hundreds of millions of dollars in securities deficits, both foreign and domestic.

J.P. Morgan Securities neither admitted nor denied the findings, but cooperated with FINRA in addressing the matter and over-reserved cash deposits to protect customers.