John Jumper was a former broker with Alluvion Securities who stole $5.7 million from Snowshoe Refractories (a Pennsylvania-based firebrick manufacturer’s pension plan benefit plan). Jumper was also ordered by Snowshoe Refractories to pay $2.4 Million in restitution. This reflects financial recoveries made by Snowshoe Refractories. He will spend 78 months in prison, followed by three years of supervision.
According to United States Attorney John Gurganus, Jumper allegedly signed bogus documents allowing him to transfer funds from the pension plan three more times between March 2015 & April 2016.
The embezzled funds were used to purchase an Arkansas tubing facility and three other businesses. He also used them to repay $1.2million in personal debts and pay his legal bills.
He also had a personal interest in the firms he bought with the embezzled money. The sale of Arkansas’ tubing company netted Alluvion Securities, his Memphis broker, more than $1,000,000 in fees.
According to the indictment, there were approximately 129 employees who were active or retired from the Snow Shoe Refractories employee retirement plan. When the $5.7 million fraud began, assets in the pension plan were valued at $9.8million.
Both the Securities and Exchange Commission and Financial Industry Regulatory Authority issued regulatory and civil sanctions against Jumper.
In November 2018, a federal judge in the Western District of Tennessee granted his motion for default judgment by the SEC. He was banned from violating securities laws and ordered to pay $5.7 million in fraudulent gains, $726,800 prejudgment interest, and to repay the money.
FINRA permanently disqualified Jumper from the securities industry in February 2017. This was due to claims that he had misused monies from Snowshoe’s pension plan for personal use and capital injections into Alluvion Securities, his member company.
With the assistance of the US Department of Labor’s Employee Welfare Services Administration, Financial Industry Regulatory Authority (FINRA), and the US Securities and Exchange Commission (SEC), the Federal Bureau of Investigation investigated this matter. George Rocktashel, Assistant US Attorney, prosecuted the case.