NEW YORK (Reuters) - The Financial Industry Regulatory Authority said on Tuesday it fined JPMorgan Chase & Co's JPM.N securities division $1.25 million for failing to conduct adequate background checks on 8,600 employees, including four people whose criminal convictions automatically disqualified them from working there.
Of the four individuals that FINRA found who were subject to “statutory disqualification” because of some criminal history, it said that one worked at JPMorgan for 10 years and another for eight years. Securities rules require banks to seek regulatory approval to employ anyone convicted of certain criminal offenses.
The regulator did not disclose the crimes to which the convictions were related.
None of the 8,600 were brokers, but all were employees, such as sales associates, subject to monitoring by FINRA, a non-governmental body that regulates the securities industry.
FINRA found that the 8,600 people were not screened thoroughly enough or not screened before or shortly after joining the bank.
The regulator also found that of that number, around 2,000 were not, as required, fingerprinted within a reasonable time frame.
JPMorgan Securities has around 35,000 associated employees total.
The inadequate background checks happened between January 2009 and May 2017, FINRA said.
“We self-reported this matter and are pleased it’s now behind us,” JPMorgan spokeswoman Jessica Francisco wrote by email.
As part of the settlement agreement, JPMorgan did not admit or deny the charges.
Reporting By Elizabeth Dilts; Editing by Steve Orlofsky
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