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Regulation and Compliance > Federal Regulation > FINRA

FINRA Bars Ex-J.P. Morgan Rep for Taking Money From Clients' Bank Accounts

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The Financial Industry Regulatory Authority barred an ex-J.P. Morgan rep from association with any FINRA member in any capacity for converting about $144,000 from three customers of the firm’s affiliated bank, according to the regulator.

Without admitting or denying the findings, David Austin signed a letter of acceptance, waiver and consent Monday in which he agreed to FINRA’s sanction. FINRA accepted the letter Thursday.

J.P. Morgan declined to comment Friday. Gary K. Springstead, a partner at the law firm Springstead, Bartish, Borgula & Lynch, who represented Austin in the dispute with FINRA, didn’t immediately respond to a request for comment.

Austin entered the securities industry in September 2016 when he joined J.P. Morgan Securities and he became registered with FINRA through his association with J.P. Morgan one month later as an investment company and variable products representative, according to FINRA.

However, J.P. Morgan terminated Austin’s registration May 5, 2020, in a Form U5 disclosure, stating the rep was discharged because “in the capacity of an affiliate bank employee, [Austin] admitted to misappropriating approximately $144,000 from affiliate bank customers for his personal use,” FINRA said, quoting the firm’s comment in the disclosure.

The disclosure is also included in Austin’s profile on FINRA’s BrokerCheck website. Austin is no longer registered as a broker, according to BrokerCheck.

The misappropriations of client funds allegedly occurred from Jan. 16, 2019, through March 19, 2020, according to FINRA. While associated with J.P. Morgan, Austin also worked for the firm’s affiliated bank, it noted.

During the relevant period, Austin “forged withdrawal slips for three bank customers, two of whom were over 90 years old, and made unauthorized cash withdrawals from their accounts, which he kept for his personal use,” according to FINRA. He also transferred funds from the joint bank account of two of the customers to his personal bank account without authorization, the FINRA AWC letter said.

As a result of his behavior, Brooks violated FINRA Rule 2010 (governing standards of commercial honor and principles of trade), according to FINRA.


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