J.P. Morgan Securities plc

On 25 May 2010, the FSA imposed a financial penalty on J.P. Morgan Securities Limited ('JPMSL' or the 'Firm') of £33.32 million for a breach of Principle 10 of the FSA's Principles for Businesses (the 'Principles') and breaches of the relevant client money rules in force during that time ('Client Money Rules'). The breach of Principle 10 and the Client Money Rules occurred between 1 November 2002 and 8 July 2009 (the 'Relevant Period') within the Futures & Options ('F&O') business of JPMSL during which time the F&O business failed to segregate client money in accordance with the Client Money Rules. Instead of being held overnight in a segregated money market account, JPMSL's F&O client money was held in an unsegregated account with J.P. Morgan Chase Bank ('JPMCB'). This error remained undetected for nearly seven years. The average amount of unsegregated F&O client money held during the Relevant Period was approximately US $8.55 billion. The Firm settled at an early stage and qualified for a 30% discount. Without the discount the fine would have been £47.6 million, which is equivalent to 1 per cent of the average amount of unsegregated client money held by JPMSL with JPMCB over the Relevant Period.