Fined for Inadequate Background Checks
Last week, the Financial Industry Regulatory Authority (FINRA) fined J.P. Morgan Securities $1.25 million for failing to conduct timely or adequate background checks on approximately 95% of its non-registered personnel.
FINRA, which is overseen by the SEC, is charged with protecting investors and market integrity. Among other infractions, they determined that for the past eight years, JPMS did not appropriately screen 8,600 individuals for all felony convictions or for disciplinary actions by financial regulators. FINRA also found that four individuals who were subject to a statutory disqualification because of a criminal conviction were allowed to associate with the firm; one for 10 years and another for eight years.
Takeaway: This is a signal to financial firms that regulators are reviewing their hiring procedures - even for non-registered personnel. As experts in pre-employment investigations, we support fully compliant candidate screenings and advocate for ongoing background investigations that are executed on a regular basis. Learn more about our expertise in this area or read the story about a recent case.