Some of Wall Street's biggest firms have been fined $1.4 million by Finra for failing to "reasonably" supervise custodial accounts, the self regulatory organization said today.

The sanctioned firms were Citigroup Global Markets Inc., J.P. Morgan Securities LLC, LPL Financial LLC, Morgan Stanley Smith Barney LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Finra said.

The financial giants paid a combined $1.4 million to settle the matter and agreed to "review their policies, systems, and procedures" to ensure their account supervision is in compliance with Finra rules, the SRO said, adding that the firms neither denied nor admitted to the charges.

Finra said it sanctioned the firms for failing to supervise Uniform Transfer to Minors Act (UTMA) and Uniform Gift to Minors Act (UGMA) custodial accounts that provide a path for clients to transfer property to a minor beneficiary without the need for a formal trust.

"The custodian makes all investment decisions on the beneficiary's behalf until the beneficiary reaches the age of majority, at which point the custodian is required by state law to transfer control over the custodial property to the beneficiary," Finra said.

The sanctioned firms, however, were deficient in monitoring whether the transfers were done in a correct and timely manner, Finra said.

"As a result, UTMA account custodians authorized transactions in UTMA accounts months, or even years, after the beneficiaries reached the age of majority and after the custodians had become obligated to transfer the custodial property," Finra said.