The White Law Group reviews the regulatory history of JP Morgan Securities LLC.
JP Morgan Securities LLC (CRD#: 79/SEC#: 801-3702,8-35008), a dual registered broker-dealer and investment advisory firm, is a subsidiary of JP Morgan Chase, the largest bank in the US. JP Morgan Chase has $3.7 trillion in assets and $303 billion in stockholders’ equity as of March 31, 2023.
JP Morgan Securities reportedly has 149 disclosure events on its broker record.
Broker-dealers may face various regulatory actions from FINRA and the Securities and Exchange Commission, including censures, fines, suspensions, and restitution. Such regulatory actions can have severe consequences, impacting the reputation and profile of the broker-dealer.
Additionally, FINRA BrokerCheck may disclose arbitration awards related to customer disputes. These awards typically reveal the outcomes of arbitration proceedings, potentially resulting in financial compensation for affected customers. If a broker or firm has multiple arbitration awards against them, it may indicate a pattern of unresolved customer complaints or misconduct. This review focuses on publicly available information concerning JP Morgan Securities, its securities sales practices, and its regulatory history with FINRA, which serves as the self-regulatory body overseeing brokers and brokerage firms.
JP Morgan Securities – Regulatory History
The following is a review of JP Morgan’s regulatory history. A regulatory history on a firm’s Central Registration Depository (CRD) can provide valuable insights into the compliance and regulatory track record of a brokerage firm. It typically includes information about any disciplinary actions, regulatory violations, customer complaints, arbitration awards, and other relevant regulatory events involving the firm. It highlights any violations of securities laws, regulations, or industry rules committed by the firm. This helps assess the firm’s adherence to regulatory requirements and its commitment to ethical practices.
On June 22, 2023, the SEC fined JP Morgan Securities $4 million for allegedly improperly deleting millions of emails and other electronic communications sent by its registered representatives, according to a SEC order. The regulator said the firm deleted 47 million electronic communications from 8,700 inboxes from Jan. 1 through April 23, 2018. This was reportedly part of a project the firm launched in 2016 to remove emails from its system that it no longer needed under securities laws.
JP Morgan reportedly discovered that the vendor it was using did not properly code the communications that were deleted. It mistakenly destroyed those from the first quarter of 2018 that the firm was supposed to have maintained for 36 months under record-keeping rules.
47 million communications from approximately 7,500 employees who had contact with customers were apparently lost. The communications reportedly included emails, instant messages and communications sent over Bloomberg terminals. Consequently, JP Morgan couldn’t retrieve them to respond to subpoenas and document requests in at least 12 regulatory investigations, including eight conducted by the SEC, according to the agency. The firm reportedly agreed to a $4 million fine and a censure.
SEC Fines JP Morgan $125 Million for “Widespread Failures”
December 20, 2021: In another incident involving business communications, the SEC fined JP Morgan Securities $125 million for “widespread” failures to keep staff communications on personal mobile devices, messaging apps and emails. JP Morgan reportedly admitted to the charges and to violating securities laws, according to the SEC order. The firm also plans to implement certain improvements to compliance policies, in addition to the fine, according to the SEC. The SEC said it discovered the alleged rules violations when a broker was unable to produce records during other investigations. JP Morgan Securities Hit with $125 Million
August 2017: J.P. Morgan Securities and three other brokers were censured and fined a total of $4.75 million for violations of various provisions of the market access regulations and “related exchange supervisory rules.” FINRA fined JP Morgan $800,000 in connection with market access rules and supervisory failures. FINRA Fines Four Big Brokers $4.75 Million
December 2017: FINRA reportedly fined JP Morgan Securities $2.8 million for allegedly failing to follow the SEC’s Customer Protection Rule. and for related supervisory failures. The SEC rule includes requirements to protect customers’ funds and securities. FINRA Fines JP Morgan Securities $2.8 Million for Supervisory Failures
January 2016: J.P. Morgan Securities agreed to pay $4 million to settle charges brought by the SEC that it made false and misleading statements about broker compensation from 2009 to 2012. On its private banking website and in marketing materials, JP Morgan reportedly falsely stated that advisors were compensated “based on our clients’ performance; no one is paid on commission.” JP Morgan Chase fined by SEC
December 2015: The Securities and Exchange Commission settled charges with two J.P. Morgan Securities and JP Morgan Chase Bank and they agreed to pay $267 million and admit wrongdoing for alleged failure to disclose conflicts of interest to clients. An SEC investigation found that the firms preferred to invest clients in JP Morgan’s own proprietary investment products without properly disclosing this preference. This preference deprived JPMorgan’s clients of information they needed to make fully informed investment decisions. JP Morgan Chase being investigated over proprietary products
JP Morgan Securities Broker Misconduct and Customer Complaints
There have been several cases of registered representatives employed by JP Morgan Securities who were allegedly involved in broker misconduct and fraudulent activities. Broker dealers are required to supervise their employees. If they fail to do so they may be held liable through a FINRA arbitration claim.
November 2022: FINRA reportedly barred Edward “Ed” Turley (CRD#: 1872294) from associating with any FINRA member at any time after allegedly refusing to provide on-the-record testimony during FINRA’s investigation. According to FINRA’s findings, the investigation was in connection with Turley’s trading in customer accounts, allegedly including but not limited to the use of foreign currency and margin, and the purchasing and selling of high-yield bonds and preferred stock.
JP Morgan Securities reportedly fired Turley after five customers in separate complaint alleged “exercise of discretion and unsuitable trading, and solicitation of an unauthorized private securities transaction” among others, were seeking more than $62 million in damages, according to FINRA. Ex-JP Morgan Broker Edward Turley Barred from Securities Industry
March 2021: FINRA reportedly suspended former JP Morgan advisor Trevor Rahn for 18 months after allegations that he implemented an unauthorized and unsuitable trading strategy for customer orders. He was also fined $10,000. Rahn purportedly engaged in a pattern of breaking customer orders for execution from January 2014 to September 2018, according to FINRA. Trevor Rahn, Former JP Morgan Broker Suspended for 18 Months
December 2016: FINRA barred three brokers that were formerly employed by JP Morgan from the securities industry. Three JP Morgan Former Brokers Barred
Failure to Supervise
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
If your broker has defrauded you, you may be able to file a FINRA claim against your brokerage firm. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.
Potential Lawsuits to Recover Investment Losses
If you have any questions about investments you made with JP Morgan Securities or if you believe that you have been the victim of securities fraud, The White Law Group may be able to help. To contact the firm, please call 888-637-5510
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.
With offices in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country. For more information on The White Law Group, please visit https://whitesecuritieslaw.com.
Tags: broker-dealer review, Ed Turley failure to supervise, finra sanctions, SEC charges, trevor rahn Last modified: June 27, 2023