JP Morgan Securities Inc. says it will pay $500,000 to settle charges that it failed to disclose to regulators that it used and paid consultants to acquire a number of municipal securities offerings.
The settlement agreement was announced by the Financial Regulatory Authority (FINRA), which is in charge of enforcing the Municipal Securities Rulemaking Board (MSRB) rules and any violations. According to MSRB regulations, firms must disclose any payments to consultants for municipal securities offerings.
FINRA says that JP Morgan actually stated in its MSRB filing that it did not use or pay any consultants to make any municipal securities-related transactions. In fact, from January 22 through June 2004, JP Morgan actually used consultants extensively in connection to its municipal bond business, paying some 40 consultants $7.1 million in total.
Yet 10 of JP Morgan’s quarterly disclosures to MSRB stated that consultants “obtained or retained” zero business. JP Morgan also denied paying consultants for municipal securities-related business even though it made at least six payments worth $750,000 in total to at least 16 consultants for at least 70 municipal securities offerings.
JP Morgan is not denying or admitting to the charges by agreeing to the $500,000 fine.
If you are the victim of broker misconduct, you should speak with a stockbroker fraud lawyer right away. An experienced attorney can help you recover your lost investment. Contact Shepherd Smith and Edwards today.
Related Web Resources:
FINRA Fines J. P. Morgan Securities $500,000 for Failing to Disclose Use of Payments to Consultants to Obtain Numerous Municipal Securities Offerings, FINRA, December 13, 2007
Municipal Securities Rulemaking Board