JP Morgan Settles with SEC for $4 Million over Broker Comp
- The Securities and Exchange Commission slapped a $4 million fine on JP Morgan for false and misleading statements to its private banking clients.
An SEC investigation into JP Morgan’s brokerage business found misleading client Marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term, in which the bank claimed to compensate advisors based on performance factors.
Advisors were instead paid a salary and a discretionary bonus based on other considerations.
“(JP Morgan Securities) misled customers into believing their brokers had skin in the game and were being compensated based on the success of customer portfolios. But none of the factors JPMS used to determine broker compensation was tied to portfolio performance,” said Andrew Ceresney, Director of the SEC Enforcement Division.
The private banking unit goes beyond a traditional brokerage, with services such as investment management (investment advisory), lending, trust and estate services, and wealth advisory (tax efficient wealth transfer advice).
The false claims were made to current and prospective customers, high and ultra-high net worth individuals, online and in marketing materials between 2009 and 2012. Employees identified the errors several times in that period, but no correction was made.
In addition to the $4 million penalty, JP Morgan agreed to be censured and must cease and desist from committing or causing any violations and any such future violations.
It's the latest in a round of fines for JP Morgan from US regulators for treatment of clients. In December, two of JP Morgan's wealth management subsidiaries admitted wrongdoing and agreed to pay a total of $307 million to the SEC and Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) for failing to disclose conflicts of interest when steering investments into the firm's own proprietary investment products.
An SEC investigation into JP Morgan’s brokerage business found misleading client Marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term, in which the bank claimed to compensate advisors based on performance factors.
Advisors were instead paid a salary and a discretionary bonus based on other considerations.
“(JP Morgan Securities) misled customers into believing their brokers had skin in the game and were being compensated based on the success of customer portfolios. But none of the factors JPMS used to determine broker compensation was tied to portfolio performance,” said Andrew Ceresney, Director of the SEC Enforcement Division.
The private banking unit goes beyond a traditional brokerage, with services such as investment management (investment advisory), lending, trust and estate services, and wealth advisory (tax efficient wealth transfer advice).
The false claims were made to current and prospective customers, high and ultra-high net worth individuals, online and in marketing materials between 2009 and 2012. Employees identified the errors several times in that period, but no correction was made.
In addition to the $4 million penalty, JP Morgan agreed to be censured and must cease and desist from committing or causing any violations and any such future violations.
It's the latest in a round of fines for JP Morgan from US regulators for treatment of clients. In December, two of JP Morgan's wealth management subsidiaries admitted wrongdoing and agreed to pay a total of $307 million to the SEC and Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) for failing to disclose conflicts of interest when steering investments into the firm's own proprietary investment products.