J.P. Morgan Securities, LLC was recently fined $1.25 million by the Financial
Industry Regulatory Authority (FINRA) for its failure to conduct adequate
or timely background checks on nearly all of its non-registered associated
persons between January of 2009 and May of 2017.
Federal law requires broker-dealers to fingerprint certain non-registered
associated persons who pose a potential risk to customers. This practice
helps firms identify any people previously convicted of crimes that would
prevent them from working in the securities industry without explicit
approval from a regulatory body.
During its investigation into J.P. Morgan Securities, LLC, FINRA discovered
that the brokerage company failed to fingerprint an estimated 2,000 non-registered
associate persons within a reasonable timeframe. On top of that, it only
screened certain fingerprinted non-registered associated persons for specific
criminal convictions noted in an internally created list and federal banking
laws. In total, J.P. Morgan Securities, LLC failed to appropriately screen
an estimated 8,600 people. The investigation also revealed that four people
whose criminal convictions disqualified them from working with the brokerage
company remained associated with the firm for as long as 10 years.
“FINRA member firms play an important gatekeeper role in keeping
bad actors from harming investors,” said Executive Vice President
of FINRA’s Department of Enforcement Susan Schroeder. “Firms
have a clear responsibility to appropriately screen all employees for
past criminal or regulatory events that can disqualify individuals from
associating with member firms, even in a non-registered capacity.”
If you lost money due to stockbroker misconduct, you may be able to recover
your losses through the legal process. At Meyer Wilson, our team of investment
fraud attorneys have spent decades working with clients, and through our
efforts we have recovered more than $350 million in verdicts and settlements.
Send us your information through our online form today.