J.P. Morgan Securities LLC (JPMS) has agreed to disgorge $1,672,923 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From January 2017 to at least December 2018, JPMS failed to establish and maintain a supervisory system, including written procedures, reasonably designed to assess whether its registered representatives recommended to retail customers short-term trades of syndicate preferred stocks that may have been unsuitable.

At least 15 of the firm’s representatives or representative teams recommended that JPMS’s retail customers purchase syndicate preferred stocks and then, in certain circumstances, recommended the sale of such positions within 180 days, resulting in customers sustaining losses on these transactions while the representatives received concessions and, in some instances, commissions.

Accordingly, JPMS violated FINRA Rules 3110 and 2010.

For this violation, JPMS was censured, fined $350,000, and ordered to pay restitution of $157,505 and disgorgement of $1,672,923.