Bank One Securities, a former Bank One unit included in JPMorgan Chase & Co.’s purchase of the firm back in July, has been recommended for disciplinary action by the NASD for not having procedures in place to prevent mutual fund late trading, Reuters reports.

JP Morgan filed regulatory papers Tuesday saying it is currently negotiating with the NASD over its "failure to establish and maintain a supervisory system and written procedures reasonably designed to detect and prevent late trading in mutual fund transactions, resulting in violations of NASD rules and the Securities Exchange Act." The company would like to settle before legal action is taken, Reuters said.

Before coming under the wing of JPMorgan, Chicago-based Bank One paid $90 million in settlement money in June for allowing hedge funds to conduct improper trades in its mutual funds.

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