Instead of being held overnight in a segregated money market account, JP Morgan Securities' client money was mistakenly held in an unsegregated account with JPMorgan Chase.

Under the FSA's client money rules, firms are required to keep client money separate from the firm's money in segregated accounts with trust status to protect the client funds if the firm goes bankrupt.

"The FSA has repeatedly emphasised the importance of ensuring that client money is adequately protected," Margaret Cole, the FSA's director of enforcement and financial crime, said.

"Despite being one of the largest holders of client money in the UK, JPMSL, failed to do so."