Archive for year: 2021

February 12, 2021 • Karen Demasters

Read the article on fa-mag.com

The matriarch of the billionaire Schottenstein family has been awarded $19 million by the Financial Industry Regulatory Authority for illegal trading in her accounts by J.P. Morgan Securities and two of her grandsons, Finra announced Feb. 5.

The compensation is to be paid to Beverley B. Schottenstein, of Bal Harbour, Fla., by J.P. Morgan Securities, and her grandsons, Evan A. Schottenstein and Avi Elliot Schottenstein, who are brothers and were acting as her brokers. The three defendants have denied the allegations that were described in the arbitration award, according to Finra. J.P. Morgan Securities should have flagged the large sales, Finra said. The grandsons worked at J.P.Morgan Securities in New York City.

The Schottenstein family, which is based in Columbus, Ohio, was once on the Forbes list of 100 wealthiest families in the U.S., but has since dropped off the list. In 2015, Forbes set the family’s wealth at $2.7 billion. The Schottensteins headed a fashion, grocery store, retail mall and home building empire that includes retailers, such as DSW and American Eagle. It is now overseeing the merger of Albertson’s and Safeway as the parent company of the two grocery store chains. Read more

February 9, 2021 – By Ian Wenik

Read the article on citywireusa.com

A panel of arbitrators found that Beverley Schottenstein’s grandsons made unauthorized purchases and sales in her account.

A panel of Financial Industry Regulatory Authority (Finra) arbitrators has ordered JP Morgan and two of its brokers to pay a roughly $19m financial penalty after the brokers were found liable for making unauthorized purchases and sales of securities in their grandmother’s account.

The arbitrators ordered JP Morgan to pay $4.7m in compensatory damages, Evan Schottenstein $9m in compensatory damages and Avi Schottenstein $602k in compensatory damages to Beverley Schottenstein and her trust. JP Morgan has also been ordered to revoke Beverley Schottenstein’s investment in a private equity fund run by Coatue Management and pay her $4.29m plus interest. Evan Schottenstein and JP Morgan have also been ordered to each pay half of Beverley Schottenstein’s attorneys’ fees. Read more

by Jake Martin and Mason Braswell – March 9, 2021

Read the article on advisor hub.com

In a claim zeroing in on the fairness of virtual hearings, a pair of former J.P. Morgan Securities brokers have asked a court to nullify a high profile $19 million award issued last month by a Financial Industry Regulatory Authority arbitration panel.

Brothers Evan A. Schottenstein and Avi E. Schottenstein filed a motion to vacate in U.S. District Court in the Southern District of Florida on Monday alleging that the arbitration process “broke down” over the 43 hearing sessions as the arbitrators dozed off, failed to address a potential conflict and declined to admit an allegedly key piece of video evidence.

The award was tied to a claim for unauthorized trading and elder abuse brought by their grandmother, Beverley Schottenstein, in July 2019. It qualified for vacature under the narrow grounds provided by the Federal Arbitration Act because the arbitrators ‘exceeded their authority’ by refusing the brothers’ request to postpone the hearing until it could be held in-person, they argued in the filing.
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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