According to FINRA, J.P. Morgan Securities LLC was censured and fined a total of $750,000, with $187,500 payable to FINRA, for maintaining inadequate financial risk management controls and supervisory procedures that failed to prevent certain erroneous orders.

The firm's market access controls were not reasonably designed to prevent erroneous orders that exceeded appropriate price or size parameters on an order-by-order basis or over short periods, or that indicated duplicative orders. The firm's controls failed to prevent five erroneous orders routed to exchanges and alternative trading systems.

The firm applied fixed single order quantity limits and static single order notional value limits that failed to consider individual characteristics of securities. These thresholds were too large to be effective, and the firm failed to provide documented rationale for setting them at such levels. Many size controls triggered "soft blocks" that paused orders until overridden or cancelled, rather than "hard blocks" that automatically reject orders. However, the firm's written procedures did not address how to handle, document, and review soft block overrides.

The firm also failed to provide documented rationale for setting limit price thresholds at levels greater than the definition of clearly erroneous transactions. Additionally, the firm lacked a reasonable duplicative order control. While it had a control checking for orders with the same symbol, side, and quantity, the 50,000-order threshold within two seconds was too high to be effective.

The firm has since implemented additional controls and enhanced procedures. This case demonstrates the importance of robust market access controls to prevent erroneous orders that can disrupt markets and harm investors. As of July 2022, the firm had implemented additional controls to prevent orders that could potentially lead to unintended market impact based on price and size relative to the market.