Media and News

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.
Read more

Beverley Schottenstein

Grandma wins $19M case against J.P. Morgan and 2 advisors (her grandsons)

financial planning
February 10, 2021, By Lynnley Browning

Read the article on financial-planning.com

j.p.morganA wealthy grandmother won a $19 million arbitration award against J.P. Morgan Securities and two former brokers — her grandsons — over alleged unauthorized trading in her accounts.

The ruling came 18 months and 43 hearing sessions after retail matriarch Beverley Schottenstein filed claims against the firm and her grandsons for alleged abuse of fiduciary duty, fraudulent misrepresentations and omissions and other misconduct. A panel of three FINRA arbitrators ruled in her favor Feb. 5, according to the arbitration award.

Schottenstein’s late husband and his brothers developed a retail empire that became Schottenstein Stores Corp. and later grew to include stakes in shoe retailer DSW, clothing chain American Eagle Outfitters, American Signature Furniture, more than four dozen shopping centers, several shoe and furniture factories and grocery chain Albertson’s Companies, among other holdings, according to business data company Dun & Bradstreet. Read more

Beverley Schottenstein

Family Affair: Panel Orders J.P. Morgan, Ex-Brokers to Pay $19 Million to Grandmother

February 9, 2021, by Jake Martin

Read the article on advisor hub.com

lawsuit settlementA 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