FINRA has slapped J.P. Morgan Securities with a $500,000 fine for allegedly failing to supervise the execution and approval of powers of attorneys submitted by non-U.S. resident customers of J.P. Morgan Private Bank.
The regulator scolded the firm for failing to detect irregularities in hundreds of powers of attorneys, including missing dates, signatures and other information required by firm. It also missed picking up on a practice by some of its registered reps of signing powers of attorneys as witnesses, when in fact they hadn't actually witnessed the signatures, FINRA claimed. The regulator said the reps bent the rules in an attempt to accommodate customers.
Had the firm investigated the red flags, it would have "prevented these practices, which were prevalent, from occurring," FINRA wrote in its filing.
The alleged failures occurred from January 2013 to December 2015 despite the existence of an account opening group, which reviewed powers of attorney, and special training that relevant personnel received.
Kaitlin Finnerty, a spokeswoman for the J.P. Morgan Private Bank, declined to comment.
In its settlement with FINRA, J.P. Morgan neither admitted nor denied the charges but consented to an entry of FINRA's findings.
In addition to the $500,000 fine, the firm was censured and ordered to implement written supervisory policies and procedures for the execution and approval of powers of attorneys from non-U.S. resident customers of the private bank. J.P. Morgan has 90 days to certify in writing that it has implemented such procedures.
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