J. P. Morgan Securities said this week that it had fired a broker accused of making unauthorized trades in a customer’s account — and reaping fees that were 10 times the typical amount — three months after settling with the customer and several weeks after The New York Times reported on the dispute.
The broker, Trevor Rahn, was discharged on Sept. 17, according to a regulatory disclosure filing that cited “unacceptable practices” related to the “timing and size of orders entered and resulting transaction charges in a client account.”
The filing, available through the Financial Industry Regulatory Authority’s BrokerCheck tool, also said Mr. Rahn had marked some of the orders at issue as authorized by the customer.
J. P. Morgan confirmed on Monday that it no longer employed Mr. Rahn, but declined to comment further. Mr. Rahn could not be reached for comment.
He continued to work at J. P. Morgan for three months after the firm settled a complaint by Tracey Dewart about Mr. Rahn’s handling of a brokerage account, belonging to her father, that she and her sister were overseeing. The Times detailed Ms. Dewart’s concerns about Mr. Rahn’s actions in an article on Aug. 24.
The settlement, dated June 13 and listed on Mr. Rahn’s BrokerCheck report, indicates that a customer had accused him of conducting unauthorized transactions from August to September 2017.
But Ms. Dewart said she had discovered what she considered questionable trading that stretched back further than the one-month period reported by J. P. Morgan.
By working with a forensic consultant, she said, she learned that her father’s account, which was worth about $1.3 million when 2017 began, had been charged $128,000 in commissions that year, about 10 times what many financial planners would charge to manage accounts that size.
In August 2017 alone, Ms. Dewart said, Mr. Rahn sold two-thirds of the portfolio, or about $822,000, and then reinvested most of the proceeds, yielding about $47,600 in commissions, according to monthly financial statements and an analysis by Genesis Forensic Consulting.
Excessive and unauthorized trading are among the top complaints in customer arbitration cases, according to the Financial Industry Regulatory Authority.
