Archive for month: April, 2021

February 9, 2021, by Jake Martin

Read the article on advisor hub.com

A panel of Financial Industry Regulatory Authority arbitrators on Thursday rendered the agency’s largest award since 2018 in a case brought by a grandmother against J.P. Morgan Securities and two former brokers—her grandsons—for unauthorized trading.

Beverley Schottenstein, 94, in Bal Harbour, Florida, was awarded nearly $19 million in damages plus attorneys’ fees and costs. She had accused J.P. Morgan and Evan A. Schottenstein in New York City, and Avi E. Schottenstein in Los Angeles, of fraud and breach of fiduciary duty over unauthorized purchases of securities between 2014 and 2019 and enrolling her in e-delivery of statements without permission.

Specifically, the respondents purchased multiple auto-callable structured notes and other securities for which J.P. Morgan was a “market maker,” including Apple stock, as well as initial public offerings and follow-on offerings, according to Finra’s case summary. Read more

February 9, 2021

Read the article at brokeandbroker.com

A recent FINRA arbitration just doesn’t seem to add up. It started in 2019 with an arbitration Complaint. The case then moved into federal court in 2020 as the litigants battled over whether the dispute belonged in court or arbitration. In 2020, the dispute is returned to FINRA, where the case is argued via ZOOM teleconferences. In 2021, the Panel issues a sledgehammer of an award, which will likely surpass $20 million in damages, interest, fees, and costs. Notably, there was a finding that JP Morgan Securities and one of the individual respondents had engaged in elder abuse. And then you look to see if the arbitrators exercised their prerogative to refer the case to FINRA-the-regulator. And you look. And look. But no such referral. $20-plus million. Elder abuse. And, yet, no referral to FINRA regulatory investigation? What more does it take. Just what am I missing here?

July 2019 FINRA Complaint

As the curtain rises on Act II of our drama, the battle rages on after Beverly Schottenstein filed in July 2019 a FINRA Arbitration Complaint against Avi Schottenstein, Evan Schottenstein, and JP Morgan Securities. In a FINRA Arbitration Statement of Claim filed in 2019, Claimant asserted constructive fraud/abuse of fiduciary duty; fraudulent misrepresentations and omissions; and violation of Chapter 415, Fla. Statutes. Beverley B. Schottenstein, individually and as Co-Trustee Under the Beverly B. Schottenstein Revocable Trust U/A/D April 5, 2011, as Amended, Claimant v. JP Morgan Securities, LLC; Evan A. Schottenstein; and Avi E.Schottenstein, Jointly and Severally, Respondents (FINRA Arbitration Award, Case No. 19-02053). Read more

Damschroder: Ohio STRS provides THE perfect example

John Damschroder Columnist – Mar. 24, 2021

read the full article at thenews-messenger.com

There’s no better illustration of the difference between public and private financial misconduct than the story of 93-year-old Beverley Schottenstein. The widow of a former Schottenstein Company president and member of the family with their name on Ohio State’s basketball arena, recently won a $19 million settlement from JP Morgan Chase and her grandsons, over allegations that the bank and brokers had profited by churning her account with high cost, inappropriate transactions.

Mrs. Schottenstein didn’t lose money, she just didn’t earn the returns she should have with investments appropriate for the investment interests of a late-in-life retiree. Family members and America’s largest bank managed the account to maximize their own profits. It’s the shorthand version of what AFT claims is happening with public money in private equity.

In Ohio, where losing 100 percent of a $525 million investment becomes a platform to brag and method to boost bonuses, lifting the curtain on private equity won’t matter unless voters pull down the lever against the politicians who let it happen.