The Financial Industry Regulatory Authority censured and fined JPMorgan $185,000 and D.J. St. Germain Co. $75,000 for municipal bond trade reporting and other muni and non-muni rule violations.
FINRA disclosed the sanctions in its monthly disciplinary actions, which it released yesterday.
Spokesmen for JPMorgan in New York City and for D.J. St. Germain in Springfield, Mass., declined to comment.
The fine against JPMorgan was for numerous rule violations, many of them not muni-related.
In the muni arena, FINRA found that the firm, between July 1, 2002, and Oct. 5, 2005, failed to report trade information from 9,200, or 3.5% of its muni transactions as was required under Municipal Securities Rulemaking Board's Real-time Transaction Reporting System and Rule G-14.
The self-regulator also found that from Jan. 11, 2005, through Nov. 14, 2007, the firm failed to report 765 municipal trades that it was required to report. In addition, from Oct. 6, 2005, through Dec. 13, 2006, JPMorgan improperly reported 3,055 muni trades that it should not have reported under the MSRB's RTTR system. This also was a violation of G-14, FINRA said.
FINRA found the firm's supervisory system did not include written procedures for the supervisory steps to be taken by the persons' responsible for compliance with G-14. This constituted a violation of Rule G-27 on supervision, the self-regulator said.
Further, FINRA found that between April 1, 2006, and June 30, 2006, the firm failed to provide written confirmations of trades that disclosed the correct yield to the customer on 144 occasions, a violation of provisions of Rule G-15.
The self regulator also cited JPMorgan for numerous trade reporting violations for corporate debt, over-the-counter transactions, equities, and short sales.
FINRA cited D.J. St. Germain for municipal and corporate debt trade reporting violations.
From April 1, 2004, through Aug. 10, 2007, the firm did not report any of its municipal securities transactions 962 transactions totaling $47.9 million to the MSRB, FINRA said.
In a statement of corrective action, the firm said upon notice of the violations, it immediately halted all muni trading and applied to the MSRB to allow it to input trades.
