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After Separation from JP Morgan, Robert Stewart Says He Just Followed Firm's Longstanding Practice

FINRA fined and suspended broker Robert Scott Stewart, formerly of JP Morgan Securities' Chino Valley, Arizona branch, for obtaining customer signatures on otherwise blank forms, and attaching copies of these signatures to other blank forms that Stewart completed and submitted to the firm. The sanction also cites Stewart for improperly exercising discretion by entering trade instructions without confirming the transactions with his customers.

Stewart replied to the allegations by making some allegations of his own against JP Morgan, notably that his own misconduct complied with the firm's existing signature practice, and that JP Morgan inundated its advisors with too many clients and no administrative support.

For instance, Stewart alleged that JP Morgan assigned him "a book of business with well over 1,000 clients, the majority of which I never met nor had time to call on."

AWC #2015044540701

According to the findings, Stewart (CRD #5746657) in 2014 submitted to JP Morgan at least 16 account transfer forms that contained photocopied signatures—a violation of FINRA rules, since attaching non-genuine signatures to firm documents constitutes falsification of books and records. JP Morgan discharged Stewart in 2015 for the violations.

Further investigation revealed that Stewart had asked each customer to sign blank transfer forms, after which Stewart completed the transfer forms electronically, and attached the photocopied signatures to these electronic documents. FINRA noted that Stewart's customers did not actually sign or review the final account transfer forms that Stewart submitted to JP Morgan, and that the forms gave the inaccurate impression that they had been signed by the customers when, in fact, they had not.

In his response to JP Morgan's termination, available via Stewart's BrokerCheck file, Stewart wrote that, "it is the firm's longstanding practice to have clients sign blank ACAT forms at account opening and later go back and fill in the information by hand or populate a computer generated copy and then attach the client signed form to the last page after handwriting in the account and transaction numbers which are unavailable at account opening."

Investigators also found that Stewart accepted orders from unauthorized third parties and exercised discretionary power in customer accounts without specific written authorization. The findings state that Stewart received trading instructions related to the customer accounts via e-mail from employees of a JP Morgan banking affiliate, and then placed trades based on this information, and without contacting his customers/account holders to confirm.

The findings state that Stewart did not have discretionary authority over the aforementioned customer accounts, and that the bank employees were not authorized to speak on behalf of the customers who controlled or owned the accounts.

Stewart replied to these allegations by accusing JP Morgan of a widespread practice "to inundate most of their advisors with substantially more clients than they could realistically serve while providing no administrative support whatsoever," saying that "it was very common" for clients to ask for funds to be liquidated/transacted from their brokerage accounts through a banker, who would in turn relay the request to Stewart.

Stewart's comment made it very clear that while associated with JP Morgan, he "never met nor had time to call on" the majority of his 1,000+ clients. Prior to his time at JP Morgan, Stewart was associated with Chase Investment Services Corp of Fountain, Colorado.

If you have invested with former JP Morgan (Chino Valley, AZ) broker Robert Scott Stewart, or with any broker or financial adviser whose failure to contact or receive authorization from you before executing transactions in your account, whose inappropriate use of discretion, or whose use of signatures on blank/forged/copied documents has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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