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JP Morgan Securities Fined by FINRA

FINRA Fined JP Morgan $200,000 for Failing to Supervise One of Their Brokers

Brokerage Firms are required to have surveillance systems in place to help them supervise their employees. These systems look for activity that could lead to violations of industry rules and regulations.

How investment firms like JP Morgan found themselves in hot water with the regulators is by failing to act on warning signs (RED FLAGS) thus allowing the bad behavior to continue.

The result of failing to act on RED FLAGS is investors being harmed.

In this instance, the client filed an arbitration case against JP Morgan. The case, which had an award in the millions, brought the issue to the attention of the regulators.

Read the AWC here. https://drive.google.com/file/d/1Zm7_T36Vnm3zXpcQl3Y0mZBPThlb1fMa/view?usp=sharing

FINRA determined that JP Morgan failed to protect their client and found they violated NASD rule 3010 and FINRA rules 3110 and 2010.

Protect your investments by auditing your portfolio regularly. You can’t always trust the systems in place. Many believe their investments must be safe if they are with a well-known brokerage firm. In reality, your portfolio is only as good as the person managing your account.

Ask your accountant to review your investments, or have your accountant call CPAA+ on your behalf.

We do not manage investors’ funds; instead, we use our expertise to help keep you from becoming a victim of financial mismanagement. If you would like a free consultation, contact us at 412-370-8524 or sign up for our weekly blog, https://bit.ly/3kzDKOj.

FINRA Sanctions a Broker so He Sets Up Shop as an Investment Advisor in MI

FINRA Sanctioned Robert David Jr. on April 22, 2022 for 20 months and a $15,000 Fine. So how can he still be giving financial advice and charging for it? FINRA Sanctioned him from associating with a Broker Dealer (FINRA Member) in any capacities. But, RIA firms are not regulated by FINRA.

The previous firm he worked for was Morgan Stanley until MS discharged him on April 2, 2019 due to the fact Mr. David entered false information about clients' net worth and liquid net worth. MS went one step further and filed an arbitration alleging Mr. David made misrepresentations with respect to corporate bond investments.

In addition, Mr. David over-concentrated clients' portfolios in non-investment grade bonds “commonly called Junk Bonds” and exercised discretionary trading without written authorization.

Read the AWC here.

Last week I posted information on how to check out your Broker or Advisor. This is a perfect example of why one would want to do so.

Click here to read last week’s blog, Research Your Investment Professional.

Robert C David Jr.’s BrokerCheck report clearly states:

Without admitting or denying the findings, David consented to the sanctions and to the entry of findings that he falsified his customers’ account profile information. The findings stated that David falsely increased the net worth and liquid net worth of eight customers and changed the risk tolerance of one customer’s account in his member firm’s systems for maintaining account profile information for brokerage accounts. David did this in order to circumvent the firm’s solicitation restrictions and concentration limits for non-investment grade, fixed-income securities. By falsifying this information, David made the customers eligible for purchases of non-investment grade, fixed-income securities, for which they would have otherwise been ineligible under the firm’s procedures. As a result, David caused the firm to maintain inaccurate books and records.

Read more at BrokerCheck report.

Before investing, always double-check to see if your broker has a license and is in good standing. You can also use a third-party like CPAA+ to audit your investments.

We do not manage investors’ funds; instead, we use our expertise to help keep you from becoming a victim of financial mismanagement. If you would like a free consultation, contact us at 412-370-8524 or sign up for our weekly blog, https://bit.ly/3kzDKOj.