Finra Fines, Suspends Ex-J.P. Morgan Broker Fired over Unauthorized Trades
The Financial Industry Regulatory Authority has fined and suspended a former J.P. Morgan Securities broker in Los Angeles who was fired over “improper” trading and whose transactions in one elderly client’s account were highlighted in two articles in “The New York Times.”
Rahn, who joined J.P. Morgan from Deutsche Bank in 2010, improperly recommended an “average pricing” investment strategy that broke larger trades into multiple smaller transactions that generated excessive additional commissions, Finra said. He also executed 577 unauthorized trades over a two-year span and mismarked 4,714 trades as unsolicited, according to Finra.
Rahn, who sources said previously had been producing about $2 million a year at J.P. Morgan, could not be reached for comment. His lawyer, Dexter B. Johnson of Mallon & Johnson in Chicago, did not return a request for comment.
A spokeswoman for J.P. Morgan declined to comment.
J.P. Morgan fired Rahn in September 2018 for “unacceptable practices” related to the timing and size of orders and transactions charges in a client account as well as marking of orders as unsolicited, according to registration records. He has not been registered as a broker since the termination.
The bank has paid $910,621 in settlements with five of Rahn’s former clients since 2016, according to BrokerCheck. Rahn did not individually contribute to the settlements, which involved complaints over unauthorized and excessive trading in equities, closed-end funds and real estate investment trusts.
The day after his termination, his wife, Jacqueline Rahn, who had worked alongside her husband for two decades, left to join Merrill Lynch’s private wealth management group (formerly known as the Private Banking and Investment Group) in Los Angeles.
Trevor Rahn started his career at Merrill Lynch in 1992, shifted to Morgan Stanley in 1999 and joined Deutsche Bank in 2008, according to BrokerCheck.
Jacqueline began her brokerage career at Merrill in 1996, four years after Trevor initiated his career there.
When the two left Deutsche after two years to join J.P. Morgan, the German bank sued and in 2014 won $722,460 plus interest representing the value of a promissory note tied to his hiring bonus. His BrokerCheck reports the balance as still unpaid, and DB Bank Securities is listed as a lienholder against him on his BrokerCheck report.