FINRA Orders JPMorgan Securities to Pay $1.25M
The Financial Industry Regulatory Authority said that J.P. Morgan Securities LLC (JPM) will pay $1.25M for not conducting proper background checks—or, in certain instances, conducting them but not in a timely enough manner—from 1/2009 through 5/2017 on 8,600 of its associated persons that were non-registered. According to the self-regulatory organization, this included the failure to properly fingerprint about 2,000 non-registered associated persons. The lapses kept the brokerage firm from knowing whether these individuals should be disqualified from employment.
Meantime, other non-registered associates persons who were fingerprinted were only screened for criminal convictions as they related to federal banking laws, as well as to list that was “internally created.” Still, said FINRA, four people who warranted disqualification due to a prior criminal conviction were allowed to work as non-registered associated persons.
Under federal securities laws, breakage firms must fingerprint certain associated staff even if they are employed in a non-registered manner because they could still pose a risk to customers otherwise. Fingerprinting allows for the identification of folk convicted of past crimes that may disqualify them from working for a firm in an associated role.
In addition to paying $1.25M to settle the charges, J.P. Morgan Securities will develop and implement a plan to address the alleged violations. However, despite settling, the broker-dealer is not denying or admitting to the charges. It did, though, consent to the entry of the regulator’s findings.
Gray Financial to Pay Over $250K for Selling Unsuitable Investments to Georgia Pension Funds
According to the US Securities and Exchange Commission’s order, Gray Financial and founder Robert C. Hubbard IV “recommended, offered, and sold” investments in GrayCo Alternative Partners II, LP to several Georgia pension fund clients even though both of them either knew or “were reckless” for not knowing (and if so then they “should have known”) that the “proprietary fund of funds” failed to comply with the restrictions that Georgia law places on alternative investments. The firm and Gray also are accused of making material misrepresentations about the alternative investment’s compliance with the state’s laws. Meantime, the Georgia public pension fund clients that bought into the investments at issue were charged more than $224K in consulting fees.
Now, Gray Financial and Gray must jointly and severally” pay over $224K of disgorgement and over $27K of prejudgment interest. Gray also has to pay the SEC a $150K civil monetary penalty and is barred from associating with any dealer, broker, investment adviser, or others in the securities industry. Former Gray CEO Robert C. Hubbard, who is also charged over this involvement, will pay a $75K civil monetary payment to the SEC.
At The SSEK Partners Group, we represent institutional investors, including pension funds, as well as high net worth individual investors. We are here to help investors in recouping their securities fraud losses. Contact us today to request your free case consultation.
More Blog Posts:
Credit Suisse Resolves NY Regulator’s Forex Rigging Probe for $135M, Institutional Investor Securities Blog, November 15, 2017
Singer Financial Corp. Accused of Making Illegal Securities Offering of Promissory Notes to Unsophisticated Investors, Stockbroker Fraud Blog, November 15, 2017
Ex- Investment Adviser is Accused of Defrauding Retirees of Over $1.85M, Stockbroker Fraud Blog, November 13, 2017