john jumper

Unveiling the Misdeeds: How a Trusted Broker Betrayed a Pension Plan

As a financial analyst and author, I am intimately familiar with tales of eroded confidence within the financial sector. Presently, I reveal the narrative of John Jumper, a one-time agent at Alluvion Securities, who shattered that trust remarkably.

John Jumper pilfered a shocking $5.7 million from the pension plan of Snowshoe Refractories—a firebrick manufacturer in Pennsylvania. His crimes did not go unnoticed. Jumper has been sentenced to 78 months behind bars and will spend an additional three years under supervision after his release.

In a turn of justice, he’s also been ordered to pay $2.4 million back to Snowshoe Refractories, reflecting the funds they recovered in the wake of his dishonesty.

U.S. Attorney John Gurganus laid out the sequence of events: From March 2015 to April 2016, Jumper allegedly signed fraudulent documents. This deceitful act gave him authority to transfer pension plan money multiple times unlawfully. The embezzled millions didn’t just pad his wallet—they fueled the purchase of an Arkansas tubing facility and three other businesses. Jumper even used stolen funds to alleviate $1.2 million of his personal debts and cover his legal expenses.

Beyond theft, Jumper had selfish motivation entwined in his investments. When he brokered the sale of the Arkansas tubing firm, the deal funneled more than $1 million in fees to Alluvion Securities—his broker in Memphis.

When Jumper’s heist started, the pension plan housed $9.8 million, designed to support 129 hardworking employees—both active and retired. His actions threatened their financial security.

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) didn’t let Jumper’s actions slide. They imposed sanctions. In November 2018, he faced a federal judge in the Western District of Tennessee, who issued a default judgment in favor of the SEC. Jumper was slapped with a securities laws violation ban and a hefty sum of $5.7 million in ill-gotten gains, plus $726,800 in prejudgment interest. He would be liable to repay every cent.

A pivotal moment came when FINRA permanently barred Jumper from the securities industry in February 2017. This was no arbitrary decision—it was grounded in the evidence of his misappropriation of Snowshoe’s pension funds for both personal use and capital injections into Alluvion Securities.

Support from the U.S. Department of Labor’s Employee Benefits Security Administration, the SEC, and the FBI was instrumental in bringing this case to light. George Rocktashel, Assistant U.S. Attorney, took the helm in prosecution, ensuring justice was served.

We must remember, “An investment in knowledge pays the best interest,” as Benjamin Franklin astutely observed. This tale serves as a cautionary reminder: Not all financial advisors act in your interest. In fact, an alarming financial fact is that a study once found over 7% of financial advisors have been disciplined for misconduct.

To all out there seeking financial guidance, I encourage you to be diligent. Check the background and credentials of any potential advisor, including their FINRA CRD number—an identifier for licensed brokers, which can reveal any past indiscretions.

The case of John Jumper poignantly illustrates the consequences of fraudulent activities within the financial sector. It’s my aim, as an analyst and narrator of these cautionary tales, to urge everyone to stay informed, skeptical, and proactive in managing their financial wellbeing. Safeguard your hard-earned money by entrusting it to those who are not only skilled but also, and importantly, ethical.

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