Finra has barred a J.P. Morgan Chase representative for allegedly persuading an elderly woman he met by happenstance to give him power of attorney and name him co-trustee of her assets—positions that made him beneficiary of 75% of her estate.
Steven Jun Lu also lied about his relationship with the woman in an attempt to open accounts to gain further control of her assets but was thwarted by suspicious bank employees, according to a Finra.
Within six months after meeting Lu, the elderly woman was diagnosed with Alzheimer’s disease, Finra said.
Lu, who worked as a representative through an association with J.P. Morgan Chase Securities LLC, and also as a relationship banker for J.P. Morgan Chase Bank N.A. at its Altadena, Calif., branch, first met the 87-year-old retiree, who lived alone, when she entered the Altadena, Calif., Chase bank on March 17, 2018, Finra said.
Finra said the woman was holding account statements from a bank other than Chase and asked to speak to someone because she had questions about her account. She was not a customer of the Chase and was visibly confused when she met Lu, Finra said. But instead of calling the bank or otherwise helping her with her account at the other bank, Lu met three days later with another JP Morgan Securities broker to discuss moving the woman’s investment accounts at another institution to the firm.
He told the other broker that the woman was a close family friend who wanted to open an account and name him as trustee on the account, Finra said. But the other broker conferred with his manager and declined to open the account, Finra said.
Shortly after that, Finra said Lu took the woman to an attorney so she could execute documents giving him power over her financial affairs. While at the attorney’s office, she entered into a durable power of attorney naming Lu as attorney-in-fact with broad powers to manage her financial affairs. The power of attorney included a provision allowing Lu to make gifts to himself of the greater of $5,000 or five percent of her assets, Finra said.
She also entered into a trust agreement in which she appointed herself and Lu as co-trustees, Finra said. The terms of the trust agreement gave Lu the authority to withdraw trust funds from any trust account. Pursuant to the terms of the trust agreement, Lu also stood to inherent 75% of the trust assets upon her death, Finra said.
Lu then, on a couple of occasions, made attempts to open accounts at Chase for the woman’s trust that he would control, but he made multiple misrepresentations to J.P. Morgan Securities S and Chase employees, Finra said. Lu twice lied to JPMS brokers that MP was a close family friend and also told a firm employee that the woman was a good friend of his mother, Finra said.
Finra said after a Chase employee questioned him about the nature of his relationship with the woman and his Chase supervisor instructed him to stop trying to open a trust account for the woman, Lu told his bank supervisor that a code of conduct specialist gave him permission to open the account, which was not true. He also failed on multiple occasions to tell the firm or Chase employees that he was the 75% beneficiary of the trust upon the woman’s death, Finra said.