Investigation Into Morgan Stanley CFP

According to a recent FinancialPlanning article, Andrew Held, a former CFP at Morgan Stanley, allegedly pressured an adviser, Johnny Burris, to sell high-priced, proprietary JP Morgan investments to elderly clients in retirement communities near Sun City West, Arizona. Burris, who recorded the call, expressed concern about what could happen if he didn’t sell the employer’s products through his position at Chase Private Client, or CPC. He is quoted as saying, “What am I going to do if I don’t sell JPM if it’s not right?” Held responds with “I’m a CFP and it’s the way I’ve always run my practice and at the end of the day, obviously, we always do what’s most appropriate for the client. Now, with that being said, it does look a bit odd if after 60 or 9- days and you’ve presented to, you know, let’s say, 30 CPC prospects-high-net-worth prospects-and you haven’t done any JP Morgan business. Can you understand how that would look odd as a private-client adviser?” Four months later, JP Morgan fired Burris for not succumbing to this pressure, according to him, despite his being a top producer. At the time, Held was not only his supervisor, but also his compliance manager.

Regulators fined JP Morgan $307 million in December for widespread sales practices. The bank was fined this amount because of cases brought against it by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission. The bank admitted it “breached fiduciary duty” by not disclosing to its clients its preference for its own products between 2008 and 2013, according to the SEC. The SEC case claimed that the breaches were widespread in two divisions at JP Morgan: its investment advisory business JP Morgan Securities and its bank JP Morgan Chase Bank-where many advisers hold CPF certifications. However, it does not state that advisers may not always act as fiduciaries when they are recommending commission-based investment products. Clients may not be aware of the difference. Because many CFPs can face pressure to sell commission products that benefit the bank, fraud is rampant, and sometimes clients are not sold investments that are suitable for them. A bank must counsel its advisors and oversee them to only sell products that are suitable for its clients. If it does not, it can be held liable for money losses. Please call our securities law firm today if you lost money with JP Morgan. We may be able to help you bring a claim against the firm for investment losses on a contingency fee basis.

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