A former JPMorgan rep was suspended for four months and fined $7,500 for allegedly failing to follow protocols in executing customer trading instructions and completing account transfer forms, according to a FINRA disciplinary filing last week.
Robert Stewart, an adviser with JPMorgan Securities in Fountain, Colorado, purportedly submitted at least 16 account transfer forms that contained photocopied signatures, meaning customers did not actually sign or review the documents, FINRA claimed.
The regulator scolded Stewart for having customers sign blank transfer forms, which he then photocopied and used to complete the transfer forms electronically.
FINRA also chided Stewart for following through on trading instructions received via email from JPMorgan Chase Bank employees without confirming the transactions with the customers. Stewart did not have discretionary power over the accounts and therefore overstepped his authority, FINRA said in the filing.
Stewart could not be reached for comment. In his settlement with FINRA, Stewart neither admitted nor denied the charges but consented to an entry of FINRA's findings.
Stewart worked for JPMorgan Securities from October 2012 to January 2015, when he was discharged for the alleged lapses, according to BrokerCheck records. He also simultaneously worked for JPMorgan Chase Bank, beginning in August 2011.
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The regulator reprimanded Citizens’ retail brokerage for not amending reps' Forms U4 and U5 within 30 days of learning of complaints.
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The rep purportedly stole $8,700 from an account funded with donations, according to FINRA.
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In a statement on his BrokerCheck report, Stewart fired back at JPMorgan, saying that the measures taken against him were "harsh, unwarranted, unnecessary and inappropriate in view of the minor nature and surrounding circumstances of the alleged infractions."
Stewart noted that it was "the firm's longstanding practice" to have clients sign blank account transfer forms at account opening and "later go back and fill in the information by hand or populate a computer-generated copy and then attach a client-signed form to the last page."
Stewart also claimed that it was "the widespread practice of the firm to inundate most of their advisers with substantially more clients than they could realistically serve while providing no administrative support whatsoever." He noted that he was assigned a book of business with well over 1,000 clients, the majority of which he never met nor had to time to call on.
"It was very common for a customer to enter a branch where I was not present, sit with a banker and ask for funds to be liquidated from their brokerage account," he said. Some of the orders were sometimes sent to him electronically, while others were occasionally executed at the instruction of a banker who had received them directly from the clients, Stewart said.
Michael Fusco, a spokesman for Chase Wealth Management, declined to comment.
