JPMorgan ex-realtors fight Grandma in court and seek her silence

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    (Bloomberg) – A 95-year-old Florida woman who won an arbitration match against her banker’s grandchildren is now fighting her in court – to collect the prize and maintain her ability to speak freely about her experiences.

    Beverley Schottenstein prevailed in financial industry arbitration earlier this year after accusing JPMorgan Chase & Co. and two of her grandchildren, who maintained their account, of improperly trading their $ 80 million portfolio , who highlighted the complications and conflicts that can arise when bankers manage money for family members.

    The panel found that JPMorgan’s securities division and the two advisers had been held liable for abusing their duty of loyalty and making fraudulent misrepresentations. It also found that the bank and one of its grandchildren, Evan Schottenstein, were held responsible for abuse of the elderly and sought approximately $ 19 million in damages.

    Read more: At 93, she waged war on JPMorgan and her own grandchildren (and won)

    On the day the verdict became known in February, Beverley Schottenstein filed a lawsuit in federal court in Miami to seek recovery. JPMorgan paid its $ 9 million stake. The grandchildren Evan and Avi Schottenstein requested that the arbitration award against them be set aside. Within a few weeks, Beverley and the grandchildren began looking for a solution, and in mid-March the parties notified the court that they had reached an oral settlement on an amount and that a written settlement would likely be in a week.

    But the deal got derailed. An attorney for the grandchildren sent Beverley’s attorneys proposed settlement terms, which did not include admissions of misconduct and a confidentiality arrangement that prevented Beverley and anyone related to her from speaking about the decision and the facts behind the arbitration, according to court records. The proposed deal did not prevent the grandchildren from speaking on the case. Beverley never agreed to these provisions, her attorney said in court files. No papers were signed and no money was ever exchanged.

    “I said forget it. I would never sign something like that, “Beverley said in an interview. “The hell with them, let the boys go to work or go to jail. One or the other no longer interests me. “

    An attorney for Evan and Avi did not respond to messages asking for comments. A JPMorgan spokeswoman declined to comment.

    A few months later, on June 29, Evan and Avi urged the judge to enforce the deal – the $ 4 million settlement the sides agreed on and the gag order. They also alleged that Beverley had already breached the confidentiality requirement because one of her granddaughters blogged about the $ 4 million offer. They cited Florida law, which allows settlements to be considered lawful without the signatures of the parties.

    “The issue is emerging in such a way that most lawyers know how to avoid it or use it to their advantage,” said Clay Roesch, an Orlando corporate attorney who is not involved in the Schottenstein case.

    Roesch said the judge could examine the email communications between the lawyers negotiating the decision to see if there were any agreements on key elements of the deal. Certain provisions, such as confidentiality, could have been made without Beverley’s express consent if her attorney had the authority to negotiate terms on her behalf, said Roesch, partner at Shuffield, Lowman & Wilson. Beverley’s attorney told the court that he had not made such an agreement.

    The judge overseeing the case has been reviewing the dispute for months and may not make a decision until the new year, Beverley said in an interview. Further arguments were filed in court earlier this month.

    Ohio shops

    Beverley, whose late husband was part of the Columbus, Ohio family who ran a department store chain, was the subject of a Bloomberg article describing what she thought happened to her property under the management of her grandchildren during her time at JPMorgan . The bank that fired the brothers in 2019 said the advisors were no longer with the company and their actions did not reflect JPMorgan’s values.

    In the arbitration that was brought before the Finra financial regulator, she accused them of paying commissions by investing their money in risky assets without telling her. She kept a diary listing unexplained credit card charges and missing bank statements. She also alleged that Evan had document shredders and a fake signature on investment documents in her Miami area apartment.

    While details of Finra arbitrations are usually kept confidential by the parties, Beverley said she decided to come forward to warn others of the potential for abuse of the elderly and to alert them that this is at America’s largest bank happened. She said she later received dozens of letters thanking her and sharing her experience of managing family members’ money.

    In April, Evan Schottenstein was banned by Finra after refusing to meet with law enforcement investigators who were investigating his grandmother’s allegations, according to documents filed with Finra. Without admitting or denying any wrongdoing, Evan accepted the sentence, effectively ending the regulator’s investigation into him. A Finra spokesman declined to comment.

    Subsequent lawsuits and attorney’s fees will likely be deducted from any money Beverley regains. The brothers said Beverley should pay her attorney’s fees resulting from the settlement dispute over the alleged breach of confidentiality.

    The dispute went on to an evidence hearing before a federal judge in Miami last month, at which half a dozen attorneys showed up or testified about Zoom for about four hours. Beverley was not called to witness, nor was Evan, who lived in a family condo one floor below Beverley’s apartment.

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    Evan and Avi’s attorneys said that at the time of the proposed settlement in March, Beverley’s attorney, Scott Ilgenfritz, orally agreed that the settlement would be kept confidential. He later sent the grandson’s attorney, Peter Fruin, a contract proposal that included a confidentiality clause. That term, Fruin said in court records, was violated in April when Beverley’s granddaughter Cathy Schottenstein Pattap posted on her blog that her cousins ​​were in talks to deal with $ 4 million of the nearly $ 10 million to deal with who owed them.

    Ilgenfritz told the judge that he had never and could not have consented to confidentiality on Beverley’s behalf as no final settlement was reached. He informed the court that the confidentiality clause and a non-disparaging clause had been added to the document by the Grandchildren’s Legal Department. Both provisions, he said, were unilateral to silence Beverley, but not her grandchildren.

    According to court files, Ilgenfritz proposed a less restrictive confidentiality clause that should apply to both sides. Ilgenfritz declined to comment, saying a new law firm had taken the lead in representing Beverley on the matter.

    Fruin said in court files that Ilgenfritz had not contradicted the deal, including a confidentiality clause, until he was made aware of Pattap’s blog post. He said Evan and Avi liquidated investments earlier this year pending the formalized deal. Even if the judge doesn’t enforce the confidentiality requirement, he argued that the court should still force Beverley to accept the $ 4 million deal.

    “Although she technically won” in the Finra arbitration, it doesn’t feel like it now, said Pattap, the granddaughter.

    “She shouldn’t still be fighting for victory,” Pattap said in an interview. “I feel like the winners here are the lawyers on all sides, not my grandmother and not my cousins.”

    Beverley now says she doesn’t want to settle for the reduced amount and that it may be her children and other grandchildren who will have to struggle to try to collect the full amount.

    “If I die – I hate to put it that way – the kids have to get the $ 10 million for me,” said Beverley. “I don’t need the $ 4 million to buy food.”

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