January 9, 2009
Former JPMorgan RR's Disclosure Violated "Just and Equitable Principles" Rule
In In re Thomas W. Heath, III, the SEC affirmed a NYSE disciplinary proceeding that found that a former registered representative of JPMorgan Securities disclosed material nonpublic information regarding the pending acquisition of a JPMorgan client to his future employer. The SEC agreed that the conduct was "inconsistent with just and equitable principles" and violated NYSE Rule 476(a)(6). It found that the disclosure was self-interested and motivated by the registered representative's desire to gain the trust of his future colleague. The SEC rejected the argument that liability must be premised on a finding of bad faith.
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