JPMorgan Fires Advisor Accused of Improperly Collecting 10 Times the Normal Fees
JPMorgan has terminated a broker accused of unauthorized trading in a customer’s account, but only three months after the firm settled a customer dispute alleging such trading, the New York Times writes.
This week, the firm confirmed to the newspaper that it no longer employs Trevor Rahn, and his BrokerCheck profile lists him as discharged Sept. 17 for “unacceptable practices” related to the timing and size of orders in a client’s account as well as the “marking of certain orders for the account as unsolicited.”
But Rahn stayed on at JPMorgan for three months after an unauthorized trading-linked settlement the firm reached with a family member of one of the broker’s clients, according to the Times. That settlement, dated June 13, deals with alleged unauthorized trading in a client’s account from August to September 2017, the paper writes.
However, Tracey Dewart, who filed the complaint on behalf of her father — Rahn’s client in the case — tells the Times that “questionable trading” in his account went on for far longer than the one-month stretch JPMorgan reported.
With the help of a forensic consultant, Dewart allegedly found that her father’s account — worth around $1.3 million at the start of 2017 — was slapped with $128,000 in commissions during the course of the year, she tells the paper. At close to 10% of the account’s value, those fees are around 10 times the amount many financial planners would charge on an account of that size, Dewart claims, according to the Times.
The paper could not reach Rahn for comment.
Regulators have been zeroing in on excessive trading in the industry in recent months.
In July, self-regulator Finra barred a 48-year veteran of the financial services industry who had been accused of excessive trading.
A few weeks before that, the SEC settled with a broker-dealer that agreed to pay close to $400,000 over alleged failures to supervise churning in client accounts.