J.P. Morgan Securities has been fined $3 million by the Financial Industry Regulatory Authority (FINRA), the regulator revealed in a disclosure this week.
J.P. Morgan Securities Fined $3 Million by FINRA
The fine was for inaccuracies in its short interest positions reporting and deficiencies in its supervisory systems.
According to FINRA, the violations spanned over 16 years, from June 2008 to August 2024, involving approximately 820,000 short interest positions totalling 77 billion shares.
The regulator found that J.P. Morgan both overreported and underreported short interest data at various times as a result of multiple operational errors.
These are said to have included misreporting positions from non-U.S. affiliates, mishandling certain stock loan activities, and excluding relevant positions in Canadian and Latin American securities.
Additionally, supervisory failures compounded the issue, with J.P. Morgan Securities seen as lacking robust procedures to ensure compliance with FINRA rules on short interest reporting.
J.P. Morgan’s inaccurate reporting was deemed a violation of FINRA Rules 4560 and 2010, as well as their NASD predecessors.
FINRA added that the firm has since enhanced policies and periodic reviews to address the reporting lapses. Alongside the fine, J.P. Morgan received a formal censure.
The bank accepted the findings and sanctions without admitting or denying them, waiving its right to contest the case further.
