by Brian Mahany
JPMorgan Chase bills itself as one of the oldest financial institutions in the nation. According to its website, it is a leader in financial services for consumers. According to the Financial Industry Regulatory Authority (FINRA), JPChase Morgan also sells junk bonds to its conservative investors.
JPMorgan was sanctioned for making unsuitable recommendations to its customers. According to a news release, the investment banking giant recommended high yield bonds (i.e. junk bonds) to customers seeking conservative investment strategies. High yield bonds are anything but. Regulators also say that some of the company’s financial advisers recommended floating rate loan funds which are often illiquid meaning they are difficult to sell if you need your money quickly.
FINRA says that Chase failed to properly supervise and train its stockbrokers. Brokers have a duty to understand their customers’ needs including how quickly they need access to their money and their tolerance to risk. Stockbrokers can only recommend investments suitable for their clients’ needs. Selling junk bonds to those wanting low risk or selling illiquid floating rate loan funds to customers who need access to their money in the near term are cler violations.
For its part, JPMorgan Chase neither admitted nor denied the allegations. It will be reimbursing affected customers for their losses, however.
If you lost money to a stockbroker or investment advisor, we may be able to help you get back your money. While no broker can guarantee your investment, brokers are responsible for following “know your customer,” suitability and other special rules. Both they and their employer can be held responsible for your losses if those rules are broken.
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