A former J.P. Morgan Advisors broker who once had a billion-dollar book of business and was praised by Jamie Dimon has been banned from the industry after costing the firm nearly $50 million in payments to his ex-clients.
Edward L. Turley's customers have already received $47.4 million in
Turley lost his job last year and has denied wrongdoing. Internet searches of his name bring a deluge of
In addition to further client complaints, J.P. Morgan could file its own arbitration claim against Turley to recoup some of the losses from the nine existing cases, said Arbitration Insight's Louis Straney, a former regulator who often serves as an expert witness. The investigation of Turley "has got legs that will probably go on for some period of time," Straney said in an interview.
"They probably need him to cooperate in these hearings and in these investigations," he said. "It's probably a little early to determine whether or not J.P. Morgan is going to come after him for any assistance. They should be freezing assets so he can't sell the boat and keep the money or sell the Ferrari and keep the money. These are big dollar amounts."
Representatives for J.P. Morgan declined to comment. Turley's lawyer in the FINRA proceeding, Andrew Harvin of Doyle, Restrepo, Harvin & Robbins, didn't respond to an email seeking comment. In interviews with other industry publications, Harvin rejected the allegations.
"Mr. Turley, at age 76, has retired from the industry and denies that he has engaged in any wrongful sales practices," Harvin
As a 28-year veteran of the industry working out of the San Francisco branch of J.P. Morgan Advisors, Turley once generated about $30 million a year from $1.6 billion in assets under management through his base of clients,
"Not only did Turley receive free lunches from management, but he also received free passes when it came to compliance with FINRA rules and the brokerage firm's policies and procedures in place to protect J.P. Morgan customers from sales abuse and unreasonable losses," Pearce wrote.
The client accuses Turley of placing him in a risky fixed income credit strategy composed of high-yield junk bonds, foreign securities, preferred stocks, master limited partnerships and other products without gaining the formal required discretion to do so. Adding to the risk, Turley carried out foreign currency transactions to secure more capital and generate undisclosed commissions rather than using traditional margin accounts, according to the client. Many of the products came from the financial and energy sectors, which hit bottom in March 2020. Another client
Asked about the client complaint seeking $55.6 million, Turley's attorney
"Because this gentleman has been a risk-taker all of his life, he was perfectly happy with the recommendations for about a decade," Harvin said of the client. "It was only when the energy markets collapsed with the onset of Covid that he sustained losses, and the losses pale in comparison to how much he's worth."
FINRA's settlement with Turley barring him from the industry doesn't identify which client claim out of the nine since May 2020 led to the regulator's investigation. FINRA sent its request for testimony in late October, seeking information about Turley's "trading in customer accounts, including but not limited to the use of foreign currency and margin, and the purchasing and selling of high-yield bonds and preferred stock." Earlier this month, Turley's lawyer informed the regulator that he was refusing to testify. He later agreed to the letter of acceptance, waiver and consent banning him from the field.
To Straney, the arbitration expert, the explanation that J.P. Morgan Chase Bank supplied to
"It was so vague and benign that it really is not in the best interests of the investor or the consumer. I've run across this for more than 40 years," Straney said. "I dont think it's in the spirit of why you have BrokerCheck."
