J.P. Morgan Securities LLC agreed to pay a $140,000 fine to help settle Financial Industry Regulatory Authority allegations that the firm violated Municipal Securities Rulemaking Board rules relating to an underwriter's submission of primary offering information and supervision.
New York, N.Y.-based JPMS, a full-service brokerage firm that engages in municipal securities underwriting, consented to FINRA's findings without admitting or denying them. In addition to the fine, JPMS was also censured, the settlement document, which FINRA accepted on Feb. 19 shows.
JPMS violated MSRB Rule G-32 as well as MSRB Rule G-27, FINRA found.
"MSRB Rule G-32(b) requires an underwriter of a primary offering of municipal securities to submit certain offering documents, forms, and other information to EMMA in connection with the offering," FINRA said in its findings, adding that the rule is aimed at ensuring municipal securities investors, the MSRB and other market participants "have timely access to accurate and complete information" regarding municipal securities offerings.
FINRA found that between May 2018 and June 2024, JPMS violated MSRB Rule G-32 by submitting inaccurate and incomplete Form G-32 filings to the MSRB's Electronic Municipal Market Access system in connection with 718 primary offerings of municipal securities for which JPMS served as underwriter.
Specifically, FINRA found that between May 2018 and July 2021, JPMS' Form G-32 submissions failed to accurately identify the retail order period in connection with 369 primary offerings of municipal securities. Between August 2021 and June 2024, JPMS' Form G-32 submissions in connection with 349 primary offerings of muni securities "either did not accurately disclose a retail order period, did not identify one or more municipal advisors or obligated persons associated with the offering, and/or did not provide information related to credit enhancement," the settlement document said.
JPMS also violated Rule G-32 by failing to submit 26 offering documents on time.
Between June 2020 and November 2022, the firm failed to "timely submit" 26 official statements, advance refunding documents and amendments to official statements to EMMA in relation to municipal securities primary offerings for which JPMS served as underwriter, according to FINRA. Those documents were submitted between one and 135 days late, FINRA said.
FINRA also found that the firm violated MSRB Rule G-27, which pertains to supervision.
FINRA found that from May 2018 to June 2024, JPMS' supervisory system, including its written supervisory procedures, were not sufficiently designed to ensure compliance with the requirement to submit accurate and complete Form G-32 filings to EMMA pursuant to MSRB Rule G-32(b), in violation of MSRB Rule G-27.
A JPMS spokesperson declined to comment Friday.
