Call Now For a Free Consultation:
(614) 502-6165

J.P. Morgan Securities Ordered to Pay $485,000 to Clients

Courtney Yeager For Blogs.1411240951543

J.P. Morgan Securities, LLC ("J.P. Morgan") was recently ordered by a three-person arbitration panel to pay two of its clients $485,000 in damages. The clients filed an arbitration against the brokerage firm and registered representative Robert Owen Klein in January 2012 for losses they suffered as a result of an investment strategy that involved short selling treasury bonds.

According to a recent article in Bank Investment Consultant, Klein invested around 40 percent of the clients' assets in these short treasury positions betting that the interest rates would rise. Unfortunately, the concentrated investments lost the clients more than $1 million. Selling the bonds short caused additional damages because it put the clients at risk of margin calls, which wouldn't have been the case if the positions had been held long. When the market moved against the short bets, Klein was forced to close the positions, resulting in substantial losses.

According to Klein's BrokerCheck report, available through the FINRA website, he has already been the subject of three customer complaints revolving around similar claims of misconduct, beginning in fall of 2011. He also has six additional complaints that are still pending, all involving investments in government debt.

One of the claims asserted against J.P Morgan in this case was failure to supervise. Under FINRA Rule 3010, brokerage firms owe their customers a duty to use reasonable care in the supervision of its agents. The rule provides that "each member shall establish and maintain a system to supervise the activities of each registered representative, registered principal, and other associated person that is reasonable designed to achieve compliance with applicable securities laws and regulations."

Failure to supervise claims can include the failure to monitor, review, and investigate red flags in its due diligence efforts, as well as in the handling of clients' investments.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram