Securities Arbitration Investment Fraud Lawyers » Investment and Regulatory News » JP Morgan Chase Securities Brokers Barred for Life

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Investment fraud rarely involves actual theft. Investors may lose their savings as the result of the tainted recommendation to purchase defective financial products, brokers may “sell away” or engage in the sale of unregistered promissory notes or other Ponzi schemes, but actual theft is generally quite rare.

However on December 3, 2013, the Financial Industry Regulatory Association or FINRA barred two JP Morgan Chase Securities Brokers from Palmdale California Fernando L. Arevalo and Jimmy E. Caballero for life from the securities industry for stealing approximately $300,000 from an elderly widow with diminished mental capacity.

Between April and July 2013, Arevalo and Caballero did just that. Specifically, at Arevalo and Caballero’s recommendation, the widow liquidated two annuities and deposited the proceeds totaling approximately $300,000 into a JP Morgan retail bank account opened for her by Arevalo. These funds were withdrawn shortly thereafter bank account via two cashier’s checks made payable to the widow and were then deposited into a bank account jointly held by Caballero and the widow at a third-party bank, opened by Caballero, and which were then “depleted” by Arevalo and Caballero through numerous cashier’s checks made payable to Arevalo and by using debit card for point of sale transactions made by Caballero and Arevalo, which included their personal expenses, payments on a real estate loan, a car loan, and purchases at retail vendors.

No Action Filed Against JP Morgan

FINRA did not bring an action against JP Morgan for the failure to supervise Caballero and Arevalo, but it did reimburse the widow for the money Caballero and Arevalo stole.

JP Morgan Chase Securities apparently discovered the theft in July 2013, however, instead of firing Caballero and Arevalo for cause as one might expect, according to their registration records, they were simply “permitted to resign.”

Guiliano Law Group

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