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

By Ian Wenik – April 14, 2021

Read the article on citywiresusa.com

The 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.

The arbitrators ruled that Evan Schottenstein and JP Morgan were each liable for elder abuse according to Florida statutes, though they did not explain their reasoning.

The Schottensteins are part of the family that owns Schottenstein Stores, a holding company which has stakes in DSW and American Eagle Outfitters, among other companies.

Beverley Schottenstein claimed that there were unauthorized purchases and sales of auto-callable structured notes, stock in Apple and shares of other companies that were making initial public offerings and follow-on offerings in her account.

JP Morgan discharged Evan Schottenstein in June of 2019 over ‘concerns relating to trading activity for the account of a family member, and the accuracy of the records regarding the same,’ according to his profile on Finra’s BrokerCheck web page.

Avi Schottenstein is no longer registered as a broker. Finra has not yet levied any discipline against him.

You can read the full Finra disciplinary report on Evan Schottenstein here.