YOU READ IT HERE FIRST: The New Jersey Division of Consumer Affairs and the Bureau of Securities this morning announced a $50,460 settlement with J.P. Morgan Securities, LLC, resolving violations that resulted from allowing unregistered agents to accept orders for the purchase and sale of securities in New Jersey.
“Investors expect, demand, and deserve full compliance with the law when they entrust their money to an investment firm,” Acting Attorney General John J. Hoffman said. “J.P. Morgan fell short when it failed to ensure compliance with New Jersey’s registration requirements when dealing with New Jersey investors.”
From 2004 through 2011, J.P. Morgan employed certain sales assistants who accepted orders from New Jersey investors, even though they weren’t registered with the Bureau of Securities — which New Jersey’s Uniform Securities Law prohibits, Hoffman said.
Morgan also failed to maintain records identifying employees who accepted orders from investors in New Jersey and other jurisdictions, also in violation of the Uniform Securities Law, he said.
At least one business unit at J.P. Morgan required its sales assistants to be registered in all 50 states. However, other units required sales assistants to be registered only in the same states as the agents they supported or tried to register sales assistants in the same states as the agents they supported, Hoffman said.
In those cases, he said, certain sales assistants accepted unsolicited orders for the purchase and sale of securities without proper registration in New Jersey.
The New Jersey Bureau of Securities participated in a multi-state investigation coordinated by the North American Securities Administrators Association (NASAA) that uncovered the wrongdoing.
In response, J.P. Morgan has made changes to its registration policies, supervisory procedures, and order entry systems to prevent the purchase and sale of securities by unregistered agents, Hoffman said.
Investigator Peter C. Cole conducted the investigation for the bureau.
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