Finra Fines, Suspends Broker Who Sold Customer Data After Resigning
A former J.P. Morgan Securities advisor in New York City who sold customer data from account lists he had printed in anticipation of losing his job has agreed to an industry suspension and monetary sanctions of $12,500.
Beston in 2011 and most of 2012 “led a team of 21” Chase advisors in 24 branches, according to his LinkedIn profile. He left to join Fidelity Investment’s discount broker in December 2012, remaining there until July 2020, according to his BrokerCheck record.
Beston sold information on about half of the J.P. Morgan customers in early 2013 to a broker from another firm who had tried to recruit him before he had joined Fidelity, according to the consent letter. The sold data did not include J.P. Morgan account numbers, but most of it was about brokers he had supervised rather than his own clients, the Finra enforcement letter said.
At Fidelity’s Flatiron brokerage office in Manhattan, Beston was a “top percentile” producer with a book of 120 clients with more than $250 million in assets, according to his LinkedIn profile.
“It’s unfortunate that this case was even considered by Finra,” said Romeo Salta, one of two lawyers who represented Beston, “but we agreed to the best deal possible.” Under terms of the settlement, neither he nor Beston could discuss details, the lawyer said.
Beston has not been registered with Finra since leaving Fidelity in July.
Beston has no customer complaints or other disclosures on his BrokerCheck and investment advisor database history, aside from a payment of $1,039 in 2014 to close a USAA account as part of a “financial compromise.”
Without admitting or denying Finra’s findings, Beston agreed to disgorge the $7,500 he received for the sold data, plus interest, to the regulator. It is due if he joins a member firm or seeks regulatory relief from any statutory disqualification that may follow, the consent letter said.
He also agreed to a $5,000 fine and the five-month suspension from working in any capacity at a Finra-member firm.
The former advisor’s removal and retention of nonpublic customer information caused J.P. Morgan to violate the Securities and Exchange Commission’s Regulation S-P customer privacy protection guidelines, the Finra letter said.
His printing and sale of the data, in turn, violated Finra Rule 2010 that requires observation of “high standards of commercial honor and just and equitable principles of trade,” it said.