Jones Fires Million-Dollar Brokers Over Elderly Client Accounts
Edward Jones earlier this summer discharged two veteran brokers on successive days over allegations that each improperly handled the account of “a senior client,” notwithstanding the fact that they produced more than twice the revenue of the firm’s average advisor.
The dismissals of the brokers, who worked in offices about 60 miles apart in southern Louisiana, indicate the growing sensitivity of retail brokerage firms to the issue of elder abuse and scrutiny of the issue by a range of state and federal regulators, said securities industry lawyers.
“I wouldn’t be surprised to see more firms focusing on this,” said Armin Sarabi, a managing attorney at HLBS Law in Westminster, Colorado, which focuses on representing financial advisors but does not represent the fired Jones brokers. “I don’t think it would have been used as a reason for termination” in the past.
Jones on June 27 dismissed Shawn Sabelhaus, a Jennings, La. broker who had been with the firm for 19 years, after investigating why a “senior” client designated the broker’s children as beneficiaries of certain accounts and investments, according to his BrokerCheck record.
Sabelhaus, who within three weeks had registered with independent broker Prospera Financial Services, did not return a call for comment.
On June 28, Jones followed up by dismissing John “Burt” Cestia III, an 18-year veteran of the broker-dealer who worked out of a prototypical two-person Jones office in New Iberia, La., some 60 miles away from where Sabelhaus worked. Cestia’s discharge similarly followed an investigation into the “handling of accounts of a senior client, including the acceptance of instructions from an unauthorized party” related to variable annuities and mutual funds, according to his BrokerCheck record.
Cestia, whose LinkedIn profile says he served as a Jones regional leader—an honor Jones reserves for “highly successful, well-respected” advisors who are asked to lead events and guide new financial advisors—did not return a call for comment. He has worked since August 1 at independent broker-dealer Triad Advisors, according to BrokerCheck.
Each broker generated annual revenue of around $1 million, said Ron Edde, a California-based recruiter at Millennium Career Advisors who said he has not personally worked with Sabelhaus or Cestia. The average advisor at Jones, the biggest retail brokerage firm as measured by its 16,235 brokers, produce revenue of about $490,000 annualized, based on a first-quarter regulatory filing from the St. Louis-based company.
Prospera spokeswoman Tarah M. Clarlow confirmed the production number of Sabelhaus. The firm “is comfortable that Mr. Sabelhaus works with his client’s best interests in mind first and foremost,” she wrote in an email.
A spokeswoman at Norcross, Ga.-based Triad, a subsidiary of Ladenburg Thalmann Financial Services, did not return requests for comment about Cestia.
John Boul, a Jones spokesman, confirmed the terminations but declined to comment on whether the firm’s approach to compliance, and to allegations of elder abuse, in particular, has changed.
The BrokerCheck reports of Sabelhaus and of Cestia are clean of any complaints from customers, firms or other entities, aside from their dismissal notices.