Beverley Schottenstein

Florida woman, 94, wins $19 million fraud ruling against JP Morgan, grandsons

Tampa Bay Times

Feb. 9, 2021, by Jay Cridlin

Read the full article on tampabay.com

breaking newsBeverly Schottenstein, part of an Ohio retail dynasty, had alleged her grandsons had improperly managed her money.

A financial arbitration group has awarded nearly $19 million to a 94-year-old Bal Harbour woman who claimed her two grandsons, then brokers at JP Morgan Securities, mishandled her money by forging her signature and making unauthorized purchases.

Beverly Schottenstein, whose family fortune came from a string of retail chains, including DSW, American Eagle Outfitters and American Signature Furniture, filed the complaint through the Financial Industry Regulatory Agency, or FINRA, a non-governmental organization that enforces rules and settles disputes involving stock broker-dealers. Read more

Beverley Schottenstein

Wealthy Florida grandma reignites multimillion-dollar battle against two former JPM brokers — her grandsons

financial planning

By Lynnley Browning – June 9, 2021

Read the article on financialplanning.com

Beverley Schottenstein

Beverley Schottenstein at home in Bal Harbour, Florida. -Bloomberg News

So much for trying to make amends with family.

A multimillion-dollar battle has flared up again between a wealthy Florida grandmother and her two grandsons whom she accused of mishandling her money while working at J.P. Morgan Securities, a new court filing shows.

Beverley Schottenstein, 94, the heir to a retail empire that grew to include stakes in shoe retailer DSW and clothing chain American Eagle Outfitters, moved June 8 to reopen her high-profile lawsuit against her grandsons in a Miami federal court, records show.

Her filing is the first since March 18, when she put on hold her civil lawsuit against brothers Evan and Avi Schottenstein, her grandsons, following an arrangement by the parties to resolve things outside of a courtroom. That truce broke down, and the gloves are now off, according to her latest filing in Florida’s Southern District. Read more

Beverley Schottenstein

How to Keep Money From Destroying Your Family Relationships

Bloomberg Watch Article
By Suzanne Woolley – Feb 17, 2021

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bloomberg wealth(Bloomberg) — You don’t have to be as rich as Brooke Astor for money to cause problems in the family.

Whether it’s fights over inheritance or simply disagreements over how money has been invested, the pain and anger tends to be magnified when relatives are involved. Disputes over financial issues can cause untold problems across all social spheres — even in families that don’t think of themselves as wildly dysfunctional. About 15% of siblings say they’ve had conflicts over issues such as inheritance and fairness, a 2017 survey by Ameriprise Financial found. In Astor’s case, her only son was convicted of siphoning millions from her estate while she suffered from Alzheimer’s — in particular, for giving himself a $1 million raise for managing her money. And then there was the teenage Pritzker heiress who sued her father and extended family, accusing them of looting her trust funds. Read more

Beverley Schottenstein

Opinion: It’s time to stop calling brokers ‘financial advisers’

marketwatch

March 18, 2021 – By Pam Krueger

Read the article on MarketWatch.com

Stop calling brokers financial advisors

Regulations and reforms to protect investors aren’t working and need repair.

This report misidentified the brokerage firm involved in the arbitration settlement. The story has been corrected.

A recent story about a 94-year old woman whose grandsons criminally mismanaged her wealth is just another reminder of how years of attempts to rein in the excesses of the brokerage industry have done little to protect consumers from harm.

For years, Florida retail matriarch Beverley Schottenstein trusted her two grandsons, both so-called financial advisers at brokerage J.P. Morgan Securities, to manage her investments. They exploited her trust by committing various kinds of fraud. According to a complaint Schottenstein filed with FINRA, the private body that oversees the brokerage industry, the grandsons forged her signature on key documents and bought and sold risky and expensive securities without her permission, resulting in losses of more than $10 million while generating hundreds of thousands of dollars in commissions for both themselves and J.P. Morgan. Read more

Beverley Schottenstein

Bilked wealthy Grandma reaches secret deal with two former JPM brokers — her grandsons

financial planning

By Lynnley Browning – April 16, 2021

Read the article on financial planning.com

Beverley Schottenstein Trial
The wealthy Florida grandmother who accused her two grandsons of mishandling her money while working at JPMorgan Chase apparently has a soft heart.

Beverley Schottenstein, 94, has waged high-profile battles with the Wall Street bank and her financial advisors there — her grandsons, brothers Evan Schottenstein and Avi Schottenstein— for allegedly abusing their fiduciary duty and making fraudulent misrepresentations while handling her roughly $80 million account.

In the weeks after industry watchdog FINRA ordered J. P. Morgan Securities and the two grandsons in February to pay her a collective $19 million — with more than $9 million coming from Evan Schottenstein — she quietly reached a deal with her grandsons that’s more favorable to them.

Under the arrangement, which is buried in a previously-unreported filing made last month in federal court in Miami, she plans to accept from at least one of the grandsons less than what FINRA ordered. Read more

Beverley Schottenstein

Billionaire Grandmother Awarded $19M Due To Grandsons’ Fraud, Finra Says

financial advisor

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

Beverley Schottenstein

Read some of The Dispatch’s historic coverage of the Schottenstein family

the columbus dispatch

The Columbus Dispatch Archives – Feb 18, 2021

Read the full article on dispatch.com

As drama unfolds around the handling of Beverly Schottenstein’s fortune in Florida, The Dispatch is sharing some of its historical coverage of the Schottenstein family.

The family that once held stakes in retail, real estate, construction businesses and more held power in Columbus for decades.

Here are some of the articles The Dispatch has written on them over the years. (The text of stories published prior to 1985 have not been digitized.)

Beverley Schottenstein

Grandmother wins $19m arb award from JPM and grandchildren

citywire

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.

finraA 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

Beverley Schottenstein

Finra bars ex-JP Morgan broker after grandmother’s $19m arb award

citywire

By Ian Wenik – April 14, 2021

Read the article on citywiresusa.com

J.P. MorganThe Financial Industry Regulatory Authority (Finra) has permanently banned a former JP Morgan broker after he was accused of making unauthorized purchases and sales of securities in his own grandmother’s account.

Evan Schottenstein agreed to the ban after he refused to testify in Finra’s investigation into the matter without admitting or denying any misconduct.

In February, a panel of Finra arbitrators ordered Evan Schottenstein to pay $9m in compensatory damages to his grandmother, Beverley Schottenstein, along with her trust. The order came as part of a $19m arbitration award in favor of Beverley Schottenstein after she lodged a complaint against JP Morgan, Evan Schottenstein and his brother, Avi Schottenstein. Read more

Beverley Schottenstein

Ex-J.P. Morgan Brokers Seek to Vacate $19-Mln Award, Cite Napping Arbitrators on Zoom

advisor hub
by Jake Martin and Mason Braswell – March 9, 2021

Read the article on advisor hub.com

Arbitrators on ZoomIn 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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