J.P. Morgan Investigation
August 2022
FINRA recently fined J.P. Morgan $200,000 for failing to supervise one of their brokers who severely mismanaged and abused the account of a 90 year old widow.
The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.
According to the recently filed regulatory pleading, from March 2014-March 2019 a J.P. Morgan broker engaged in unsuitable and unauthorized trading in the account of the broker’s 90 year old grandmother. Regulators found that J.P. Morgan failed to take reasonable action to investigate and address the broker’s action, notwithstanding the presence of various “red flags”.
The regulator found that the account of the elderly client was over concentrated with structured products in violation of various FINRA rules and firm policies. In order to conceal these violations the broker misrepresented the net worth of the client. According to the regulator the firm had a duty to investigate the large purported increase in the net worth of the client, but failed to do so. Supervisory instructions to consult with the client were ignored allowing the abuse to continue.
In addition to the unsuitable recommendations made by the broker, FINRA found that more than 100 unauthorized trades were made in the account. As a result the account suffered millions in losses. In February 2021 a FINRA arbitration panel awarded damages of nearly $19 million to the client.
J.P. Morgan is headquartered in New York City and has been a member of FINRA since 1936. The firm has more than 27,000 registered representatives located in some 5,300 offices nationwide.
If you have questions about how your investment account is being handled, call to speak with an experienced securities attorney. No charge for initial consultation.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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