Most of the failures to disclose required information concerned reps who voluntarily resigned after they became the subject of an internal review, or where the firm began the internal review after the rep was terminated, Finra said.
Finra found that JPMS’s failures resulted primarily from the firm's failure to establish and maintain reasonably designed written supervisory procedures and supervisory systems to identify all instances when disclosures were necessary, Finra said
As a result, in addition to the $1.1. million fine, Finra also required JPMS to take appropriate corrective measures within 60 days.
Broker-dealers are required to file with Finra a Uniform Termination Notice for Securities Industry Registration (Form U5) within 30 days of terminating a registered representative's association and to file an amendment with Finra within 30 days of learning that anything previously disclosed on the Form U5 is inaccurate or incomplete.
Firms must disclose, among other information, allegations involving fraud, wrongful taking of property, or violations of investment-related statutes, regulations, rules or industry standards of conduct.
Finra said it uses this information to help identify and investigate potential misconduct, and sanction individuals as appropriate. State securities regulators and other regulators use the information to make informed regulatory and licensing decisions. Member firms use this information to make informed hiring decisions, and investors use this information—displayed through Finra's BrokerCheck—when considering whether to do business with a registered or formerly registered person, Finra said.