Podcast Center
Video Center
Webcasts
Resource Center
Events
By 
December 13, 2021 at 06:17 PM
What You Need to Know
- A client alleged the firm was responsible for unsuitable securities trades that were made in her account by her broker.
- The trades in question allegedly included high-risk equities and junk bonds.
- The client had requested considerably more than the $4 million she was awarded by the panel.
J.P. Morgan Wealth Management declined to comment Friday after a three-person panel of public arbitrators in Houston ordered the firm to pay $4 million to a client who alleged the firm was responsible for unsuitable securities trades that were made in her account, including in high-risk equities and junk bonds, by her broker.
In a Financial Industry Regulatory Authority arbitration dispute, Lacey Winston Keath asserted, among other things: breach of contract and warranties, violation of state securities laws, statutory fraud, breach of fiduciary duty, negligence and gross negligence, misrepresentation/omission and negligent misrepresentation/omission, unjust enrichment and failure to supervise.
Keath alleged that, “without receiving her authorization,” J.P. Morgan Securities traded “unsuitable securities in her account, including high-risk equities and ‘junk bonds’ and used leverage to facilitate the trades, including foreign currency positions that increased the risk in [her] account.”
J.P. Morgan denied the allegations made in the statement of claim and asserted various affirmative defenses, as well as contractual indemnity. The firm alleged that Keath agreed to indemnify the firm under the terms of a customer agreement and the terms of the Durable Power of Attorney for Financial Management.
Keath had requested an award in excess of $5 million, including “all direct and/or consequential damages and statutory and/or punitive damages, plus interest and costs.”
In the Statement of Answer and Counterclaim, the firm requested the action be dismissed and the panel direct all FINRA forum fees be paid by the claimant and indemnification for all current and future losses resulting from this arbitration. The firm also requested that any damages, fees, costs or interest awarded to the claimant be set off against any damages, fees, costs or interest awarded.
