News Releases

An NYSE hearing panel found that, between July 1, 1999 and June 30, 2002, the firm failed to ensure compliance with certain NYSE rules and federal securities laws.  The firm consented without admitting or denying guilt. 

• In addition, the hearing panel found the firm lacked adequate systems or procedures for the preservation of electronic mail communications.
  
• NYSE Regulation, the U.S. Securities and Exchange Commission and NASD Inc. discovered these deficiencies during a joint inquiry into the supervision of the firm’s research and investment banking activities.

“J.P. Morgan Securities’s representation that its email production was complete, without disclosing that it had failed to retain, locate and restore all email responsive to our investigation, is simply unacceptable,” said Susan L. Merrill, chief of enforcement, NYSE Regulation. 

The NYSE imposed a penalty of a censure, $2.1 million fine, and a requirement that the firm review its procedures regarding the preservation of electronic communications for compliance with Exchange rules and the federal securities laws.  J.P. Morgan Securities consented to the penalty.  The amount paid to the Exchange by the firm was reduced by $700,000 pursuant to a civil monetary penalty paid to the U.S. Treasury and by $700,000 pursuant to a fine paid to the NASD, in related proceedings.

About NYSE Regulation

On December 17, 2003, the SEC approved a new governance structure for the NYSE.  Under the new design, the NYSE Board of Directors is comprised solely of independent directors, except for the chief executive officer, who have no affiliation with any regulated member firm.  A new position of chief regulatory officer was created and reports directly to the board of directors through a new Regulatory Oversight Committee.  As a result, NYSE Regulation is insulated from potential influence from NYSE members and member firms, operates separately from the business side and is independent in its decision-making.

NYSE Regulation plays a critical role in monitoring and regulating the activities of its members, member firms and listed companies, as well as enforcing compliance with NYSE rules and federal securities laws.  Nearly 400 of the largest securities firms in America are members of the New York Stock Exchange.  These firms service 92 million customer accounts, or 90 percent of the total public customer accounts handled by broker-dealers, with total assets of over $3 trillion.  They operate from 19,000 branch offices around the world and employ 146,000 registered personnel.  Nearly 700 employees, or more than 40 percent of the Exchange’s staff, work for NYSE Regulation, which consists of four divisions: Market Surveillance, Member Firm Regulation and Enforcement and Listed Company Compliance. 

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