Securities Industry Commentator by Bill Singer Esq

December 28, 2017

FINRA Fines J.P. Morgan Securities LLC $2.8 Million for Customer Protection Rule Violations and Supervisory Failures (FINRA Press Release) The Financial Industry Regulatory Authority fined J.P. Morgan Securities $2.8 million for violating the SEC Customer Protection Rule and for related supervisory failures. READ the FULL TEXT AWC Settlement Agreement. As set forth in part in the FINRA Press Release:

FINRA found that from March 2008 to June 2016, J.P. Morgan Clearing Corp. did not have reasonable processes in place to ensure that its possession or control systems were operating properly. Shares that should have been segregated were available for the firm's use, due to systemic coding and design flaws, recurring and unresolved deficits and unreasonable supervision. By failing to move and maintain securities in good control locations, the firm created deficits in foreign and domestic securities valued at hundreds of millions of dollars. For example, J.P. Morgan failed to move Italian securities to a good control location for nearly two years, and on one sample day, created a deficit in 81 Italian securities worth approximately $146 million.

FINRA Wrestles With No Debt False Statement Versus Untrue One ( Blog)

Wall Street's communications with the public have come under scrutiny in recent years and with good cause. You look back to the lead-up to the Great Recession and there were a lot of lies being told to unwary investors. Now, whether those investors should have been unwary is another question for another day but, for now, let's just say that there were a lot of folks pushing a lot of toxic crap on folks who were seen as easy prey. Not a pretty picture. All of which explains why there is an enhanced focus on how investment products are marketed online, on air, and during seminars -- not that it's a particularly effective line of defense but, you know, the Maginot Line looked like it would work, right? In a recent FINRA regulatory settlement, we see the best and worst of Wall Street regulation. On sound ground is the self-regulator's unhappiness with one guy's use of his personal email to engage in business communications. On less sound ground is the self-regulator's unhappiness with that same guy's statement to a client about whether an issuer had or didn't have any debt. READ