Former San Francisco Financial Advisor Is Barred Following Over $100 Million in Investor Claims Filed Against JP Morgan
Nearly a year after FINRA Lawyers, Shepherd Smith Edwards and Kantas (investorlawyers.com) won a $4 million Financial Industry Regulatory Authority (FINRA) arbitration claim against JP Morgan Securities, the former star broker involved, Edward Turley, has been now barred from the industry. Turley, who was the financial advisor in at least nine recently filed customer complaints alleging unauthorized and excessive trading, has consented to the bar. Turley’s former clients are claiming that they suffered over $100 million in investment losses.
The ex-San Francisco-based financial advisor was fired by JP Morgan Securities in August 2021. Last month, FINRA, which was investigating the allegations against him, asked Turley to provide testimony about his trading patterns. This would have included patterns involving margin and foreign currency, as well as the buying and selling of preferred stock and high-yield bonds. Turley declined. His refusal to testify violates FINRA Rule 8210, which requires brokers to cooperate with enforcement investigations, as well as FINRA Rule 2010, which requires high standards of commercial honor for FINRA members.
Records show that Turley, who worked nearly three decades in the industry, earned up to $30 million in commissions some years while handling $1.6 billion in client assets. Turley’s BrokerCheck report notes nine customer disputes with settlements so far exceeding $40 million. One of the still pending FINRA lawsuits includes the largest claim filed to date. That complaint is a $56 million arbitration claim made by a Texas businessman. There are also ongoing investor loss cases in which the claimants are seeking damages in the eight figures.
Examples of other broker fraud misconduct allegations against Ed Turley include misrepresentations, the unauthorized exercise of discretion, unsuitable investments, and selling away.
When Brokerage Firm Negligence Costs Investors
Turley is accused of using a “one-size-fits-all’’ investment strategy for virtually all of his clients. Turley’s alleged investment scheme included a fixed-income credit spread investment strategy that involved preferred stock, high-yield/junk bonds, exchange-traded funds (ETFs), foreign bonds, and master limited partnerships (MLPs). To employ this credit spread strategy, rather than buying the securities in regular margin accounts, Turley purportedly engaged in foreign currency transactions to raise funds and leverage the accounts of clients so he could earn an undisclosed commission. Not only that, but Turley allegedly would go on to overconcentrate and overleverage investors in these risky, illiquid investments. This has led to significant investment losses. For many of his clients, the losses were millions of dollars after market volatility struck in early 2020 at the start of the COVID-19 pandemic.
Meanwhile, Turley allegedly misrepresented his investment strategy to investors as an approach that was low in risk and would allow them to make “equity-like returns.” Turley purportedly reassured his clients not to worry about the way in which he was using leverage in their accounts and told clients they would still be able to access their funds. Turley also may have misled clients about their accounts’ performance.
The truth is that Turley was using a highly risky investing strategy. Not only that, but it was also an approach that was unsuitable for many of his clients even if they were high-net-worth investors. Despite the fact that Turley lacked the authority to conduct these transactions that are now at issue without the consent of his customers, Turley allegedly continued to exercise his discretion.
High-Net-Worth Investors At Risk of Becoming the Victims of Broker Fraud
Not all high-net-worth individual investors are sophisticated investors, which means they may not fully understand the kinds of complex investments or strategies, as well as the risks. Even if they are experienced investors, the fact that high-net-worth clients have so many assets may make them a target of rogue financial professionals and others seeking to take advantage of them. These are even more reasons why brokerage firms should oversee the activities of their registered representatives who are tasked with managing these investors’ assets.
How Can You File A FINRA Lawsuit Against JP Morgan Securities?
As the broker-dealer where he was registered, JP Morgan had a duty to properly supervise Turley, who was a top-earning financial adviser. This included monitoring activities in his customers’ accounts and ensuring that no unsuitable recommendations or unauthorized trades were enacted.
Unfortunately, the fact that Turley was considered a star broker may have compelled JP Morgan Securities to ignore any red flags that showed he was engaged in broker misconduct. This is alleged broker-dealer negligence.
Our savvy FINRA lawyers are continuing to represent investors who worked with Turley in their securities fraud claims against JP Morgan Securities. To file a FINRA lawsuit for financial recovery, you need to work with skilled brokerage firm FINRA Lawyers like SSEK who have the experience and resources to go after a big Wall Street firm like JP Morgan Securities.
With FINRA Lawyers, Shepherd Smith Edwards and Kantas by your side, we can help you determine whether you have grounds for an investor loss claim. Should we agree to work together, we will prepare a solid FINRA arbitration claim on your half and fight for you. To schedule your free, no-obligation case assessment, call (800) 259-9010 today.