JP Morgan Securities LLC (JPMS) has agreed to pay a fine of $ 150,000 as part of a settlement with the Financial Industry Regulatory Authority (Finra).
From January 2018 to December 2021, the JPMS Supervisory System and WSPS (WSPS) were not reasonably designed to achieve compliance with the preliminary delivery obligations of the IPO newsletter in accordance with Article 15C2-8 (b) of the exchange law.
While the business’s WSPs demanded that the company deliver a copy of a preliminary IPO newsletter to a customer expected to receive a distribution, the supervisory system and the WSP governing the procedure were not reasonably designed to verify that this delivery had been made.
During the relative period, the company’s supervisory system and WSPS on preliminary IPO newsletters required supervisory authorities to ascertain whether the customers had provided JPMS with the consent to allow the required preliminary newsletters to be delivered online and if JPMS had they are sent.
The Supervisory System did not provide a review or procedure to determine whether the IPO preliminary newsletters had been successfully delivered to the institutional customers of the business. As a result, the information available showing that the newsletters had not been delivered were not examined by the business.
In addition, from March 2019 to December 2021, the company examined whether the institutional customer had provided electronic consent and had an email address in the file for a three -quarter sample.
Therefore, for most of the approximately 400 IPO distributed by the business during the period, there was no supervisory review on the preliminary delivery of the IPO newsletter.
The company also failed to add customers who refused to provide electronic consent to a list of customers that would provide hard copies of the preliminary IPO newsletters by mail as required by the business’s WSPs.
As a result, the company’s supervisory system was not determined in a timely manner if the company had provided preliminary newsletters to the company’s customers at least 48 hours prior to sending confirmation to institutional customers and the company did not detect cases where the company did not give preliminary IPOs in time.
The operation self -determined some of these preliminary delivery shortages of the IPO newsletter in October 2021 and took corrective actions to correct the shortcomings and review the WSPs on December 30, 2021 and again on January 10, 2024.
With the receipt implementing a supervisory system that is reasonably designed to achieve compliance with the preliminary delivery obligations of the IPO newsletter, JPMS violated the FINRA 3110 (A), 3110 (B) and 2010 rules.
In addition to a fine of $ 150,000, JPMS agreed to an accusation.