Should You Trust Your Broker?
Investment customers should read JP Morgan chase reviews before investing. JP Morgan securities (JPMS) is a subsidiary of Chase bank. JPMS engaged in unauthorized trading and altered statements to cover up fraud. JPMS did not completely and faithfully transfer the investment account to the next brokerage firm upon the customer’s request.
The customer brought her case against JP Morgan Chase before the financial regulatory authority (FINRA). In the FINRA arbitration case, the self-directed investment account customer alleged that JPMS engaged in fraudulent and dishonest practices. The customer showed that her account documents were altered/changed after she confronted JPMS about unauthorized trading activity in a her non-discretionary self-directed cash account.
Unauthorized Trades of FULL Shares of Common Stocks
The customer provided JPMS account statements that showed unauthorized trades of FULL shares of common stocks with corresponding realized losses and wash sales. Instead of providing an explanation, JPMS changed/altered the account statements resulting in inconsistent statements. The customer printed both statements (original and altered) to show FINRA that fraud and dishonest practices will continue to be rampant unless perpetrators are punished.
The customer showed that one set of JP Morgan account statement showed sales of full shares with corresponding losses, while the questionable trades magically disappeared from the second set of investment account documents also provided by JP Morgan chase. The customer then complained to FINRA against JPMS alleging that JP Morgan securities is involved in dishonest practices.
Unauthorized Trades Magically Disappeared in the Altered Statements
Despite tangible evidence, JPMS denied that trades ever occurred and blocked the customer’s online access to her own online investment account. JPMS failed to explain how unauthorized trading activity was seen in the original statements but disappeared in the altered statements. The altered statements did not say ‘corrected’. JPMS continued to deny that unauthorized trades occurred, which changed during the arbitration proceedings. The attorney representing JPMS accepted that the unauthorized trades were ‘open orders’. However, later, the attorney changed her statement and said that the trades did not occur at all, despite clear evidence.
Analysis of the Finacial Industry expert
The industry expert hired for this case wrote in her opinion report that
“…In addition to the issue of palpable confusion and conflicting information from these documents, there appears to be no reasonable explanation as to why JPMS documents would show “realized” short-term loss if, in fact, these were not trades.”
In the FINRA arbitration, the customer sent THREE subpoenas requesting discovery documents. JPMS objected to produce many discovery documents. Eventually, the customer filed two motions to compel discovery against JPMS. The arbitration panel ordered JPMS to produce ALL documents related to the customer’s account including JPMS’ employee communication regarding customer’s complaints. Despite the clear orders, JPMS did not produce important documents that showed the internal employee communications regarding the customer's account discrepancies.
JP Morgan Dragged its Feet To Avoid Submitting Evidence Against SEC Regulations
JPMS dragged its feet and despite arbitration panel’s explicit order did not produce all discovery documents. Interestingly, JPMS also produced thousands of pages of blank documents along with some relevant documents. However, the essential documents including employee conversation was still missing. The customer filed the second motion to compel JPMS to produce discovery documents. After the second motion to compel was filed, JPMS produced some documents. Those documents revealed the internal communications between JPMS employees. Evidently, the employees themselves questioned the accuracy of JPMS’ book keeping team.
In 2021, JPMS Agreed To Pay A $125 Million Penalty To SEC.
Excerpts from the SEC press release are below.
“JPMS admitted the facts set forth in the SEC’s order and acknowledged that its conduct violated the federal securities laws, and agreed to pay a $125 million penalty and implement robust improvements to its compliance policies and procedures to settle the matter.”
“JPMS acknowledged that its recordkeeping failures deprived the SEC staff of timely access to evidence and potential sources of information for extended periods of time and in some instances permanently. As such, the firm’s actions meaningfully impacted the SEC’s ability to investigate potential violations of the federal securities laws.”
“JPMS agreed to the entry of an order in which it admitted to the SEC’s factual findings and its conclusion that JPMS’s conduct violated Section 17(a) of the Securities Exchange Act of 1934 and Rules 17a-4(b)(4) and 17a-4(j) thereunder, and that the firm failed reasonably to supervise its employees with a view to preventing or detecting certain of its employees’ aiding and abetting violations. JPMS was ordered to cease and desist from future violations of those provisions, was censured, and was ordered to pay the $125 million penalty.”
JP Morgan brokerage account review can also be found on the links below.
More info about SEC order can be found at https://www.sec.gov/news/press-release/2021-262
Full court order can be found at https://www.sec.gov/files/litigation/admin/2021/34-93807.pdf
