J.P. Morgan Securities has agreed to pay a $675,000 fine to settle Financial Industry Regulatory Authority (FINRA) charges after allegations surfaced that the securities firm failed to properly report fixed-income securities transactions, causing it to report hundreds of thousands of client transactions past the deadline – and incorrectly.
The rules provide a 15-minute window in which to report an executed fixed-income securities transaction. From 2008 to 2013, FINRA stated that the company failed to timely report many fixed-income securities transactions, and when finally done, the correct timing wasn’t provided.
FIRNA’s Fine Relates to Client Transactions
The target of FINRA’s anger surrounded the securities firm’s “riskless principal transactions,” which are client transactions that are bought and sold with Wall Street professionals, and then offset with corresponding transactions with the clients.
J.P. Morgan Securities timely reported the “street”transactions with FINRA’s Trade Reporting and Compliance Engine (TRACE) and MSRB’s Real-time Transaction Reporting System, but failed to report the client-side fixed- income securities transactions in a timely manner.
Failing to accurately report the transactions of fixed-income securities and then misreporting the timeliness of trade executions led to errors in more than 280,000 separate transactions.
According to FINRA, the errors were a result of the firm’s failure to understand reporting requirements of fixed-income securities and the rules regulating them. JPMorgan was also accused of lacking a proper supervisory system to ensure compliance with the rules, including how oversight should have been documented.
FINRA Fine Lowered for Cooperation
Because J.P. Morgan Securities cooperated with FINRA, and self-reported the violations upon discovery in 2013, the FINRA fine amount was far less than what it could’ve been.
Did you Lose Money with Fixed-Income Securities?
Fines like this demonstrate that even well-known securities firms are not above making mistakes. If you lost money because you believe your broker or brokerage firm failed to understand the risks of a particular transaction you may have certain legal rights that require your immediate attention.
Call a Los Angeles Securities Fraud Attorney Today
Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.