J.P. Morgan Penalized for Failing to Meet FINRA Reporting Standards

Contents

01

Lapses in Regulatory Reporting

02

Supervisory Deficiencies Identified

03

Remedial Actions and Outcome

Lapses in Regulatory Reporting

According to FINRA, J.P. Morgan submitted dozens of restricted period and trading notifications either late or with inaccurate information during the review period. From April 2020 to January 2022, the firm filed 64 restricted period notifications late, some by as much as a week, and another 75 were found to be inaccurate. These errors included missing or incorrect Central Registration Depository (CRD) numbers and failure to properly identify whether distribution participants were FINRA members.

Between May 2020 and March 2022, the firm also filed 13 trading notifications late—up to 116 days in one case—and failed to submit one required report entirely. Additionally, nearly 100 trading notifications were submitted with inaccuracies during that time.

Supervisory Deficiencies Identified

The root of these issues, FINRA found, lay in the firms inadequate supervisory systems and internal procedures. Particularly during the transition to a new deal management system, the firm did not ensure its data was properly migrated and verified. Written Supervisory Procedures (WSPs) in place at the time lacked detailed protocols for verifying notification accuracy and timeliness.

The firm also failed to update or amend notifications when additional distribution participants joined after an initial notice had been filed—a key compliance step under FINRA Rule 5190. Instead, J.P. Morgan relied heavily on automated system features, which lacked the necessary safeguards to catch these issues.

Remedial Actions and Outcome

Between March 2022 and January 2024, the firm implemented several corrective actions. These included correcting inaccurate CRD entries, updating its WSPs to mandate amended filings, and improving its internal review procedures. While the steps were acknowledged by FINRA, they did not negate the need for disciplinary action.

As part of the resolution, J.P. Morgan will pay the financial penalty and has accepted a formal censure. The case serves as a reminder that even well-established institutions must maintain rigorous compliance frameworks in an evolving regulatory environment.