JP Morgan fined $1.25 million for failing to screen employees

Over 8,000 employees at JP Morgan were not screened or fingerprinted as required by federal securities law in the US.

JP Morgan has been caught out failing to carry out background checks or taking fingerprints for more than 8,000 of its employees.

The Financial Industry Regulatory Authority (FINRA) handed the investment bank a $1.25 million fine for the failures occurring between January 2009 through to May this year.

FINRA said around 2,000 employees at JP Morgan were not fingerprinted - as required by Federal securities laws in the US - and it failed to screen employees to determine if they had been banned from working at the firm.

As a result of this, four employees who were in fact disqualified due to criminal convictions were allowed to ‘associate or remain associated’ with the bank during that time frame, FINRA said.

Susan Schroeder, executive vice president of FINRA’s Department of Enforcement, explained firms like JP Morgan play an important gatekeeper role, keeping bad actors from harming investors.

“Firms have a clear responsibility to appropriately screen all employees for past criminal or regulatory events that can disqualify individuals from associating with member firms, even in a non-registered capacity,” she added.

JP Morgan neither admitted or denied the charges, but has agreed to pay the settlement and prepare plans to address the issue.