New York Securities Fraud Lawyers Blog
At 85 with growing cognitive issues, Susan Kraus should be enjoying her elder years, seeing theater shows she loves and grandchildren she adores, but instead is in the fight of her life against three financial institutions, including JPMorgan Securities LLC (JPMS), Schwab and Francis Financial, to recover more than $8 million – virtually her entire nest egg –that was stolen by her SEC-barred son, Brett Graham. Malecki Law has taken on a growing number of these cases and encourages you to reach out to its New York Elder Financial Fraud lawyers if you have information about this case or one of your own. Money laundering and wire fraud happens at financial institutions and we allege that policies and procedures to prevent them either did not exist or were not followed.
Respondent JPMS is Kept in The FINRA Case it Badly Seeks to Get Out Of
Kraus served a Statement of Claim against three financial institutions in FINRA on October 1, 2025, including JPMS, Schwab and Francis Financial.
JPMS argued that it was the wrong party and its affiliate J.P. Morgan Chase Bank (JPMCB) would be the appropriate party and should be sued in another forum. JPMS filed a motion to dismiss itself from the FINRA case on February 14, 2025, which the FINRA Panel ultimately denied “with prejudice” on June 12, 2025. They have refused to provide any documents and a Motion to Compel is pending at FINRA with a hearing starting in October 2025.
Malecki Law argued that JPMS and JPMCB wanted a partnership in and access to high net worth client accounts in the private client group when it was financially beneficial but at the same time want to disclaim the related responsibilities that come with such access and review, as well as the responsibilities of licensed financial professionals designated in those relationships. This is a recipe for disaster and Malecki Law maintains that this is against elder financial fraud laws and rules in the industry, let alone public policy.
JPMS attempted the same arguments in federal court after filing its answer in FINRA (seeking a second bite at the apple), but to no avail. Specifically, JPMS filed a complaint on January 25, 2025, an amended complaint on May 1, 2025, and a request for preliminary injunction on June 20, 2025 (days after it lost its FINRA motion to dismiss).
On August 18, 2025, Judge Furman, of United States District Court Southern District of New York, ultimately denied JPMS’s and its affiliate JPMCB’s request for a preliminary injunction of the FINRA case and granted Ms. Kraus’ motion to dismiss JPMS’s complaint. See SDNY Case No. 25-CV-745. Kraus is set to have her day in FINRA arbitration in early October 2025. Judge Furman importantly held: “That JPMS may have subjectively believed that it was also reserving the right to have the issue decided by a court is of no moment….Having made that choice (not to mention having already submitted the question to the FINRA arbitrators and lost), JPMS may not now obtain relief from a court.
SEC-Barred Son’s $8+ Million Fraudulent Scheme
In May 2025, the Department of Justice announced that Graham pled guilty to defrauding Kraus out of $8.4 million. According to the DOJ’s press release and the Kraus family, Graham bilked his mother out of hundreds of thousands of dollars per month that he used on luxurious trips, lavish jewelry, and high-end art for himself and his girlfriend, all while his mother suffered from declining cognitive abilities. Graham is also alleged to have used the stolen funds to pay the rent at his Miami-skyscraper apartment and to cover exorbitant credit card bills concurrent with his mother being forced to move from her senior community on New York’s Upper East Side because she could no longer afford her own rent.
The Fraud’s Channel Through Three Financial Firms
Graham is alleged to have used the three financial institutions as conduits for his fraudulent scheme against his mother: Francis Financial, Inc. (Francis Financial), Charles Schwab & Co., Inc. (Schwab), and JPMS. In a number of similar cases, Malecki Law – a senior investment scam focused law firm in New York City– has also wrangled with these issues in third party elder fraud computer scam cases that are on the rise at institutions like these and encourage you to reach out if you have an issue. Any or all of these firms could have detected red flags, prevented misconduct, or reported the same, yet it is alleged that none of this happened. The securities-industry-barred son, who pled guilty to the fraud, was somehow able to steal and convert his mother’s $8.4 million financial cushion for his benefit and under these firms’ noses in accounts with their financial institutions. The red flags in this case were plentiful and all covered in industry publications as something to look out for in managing elders’ accounts.
Francis Financial is a New York based Registered Investment Advisor (RIA) that specifically touts its protection of and financial planning for widows and elderly women. The President/CEO, Stacy Francis, publicly shares that her grandmother was trapped in an abusive marriage which inspires her life’s purpose to assist women with their financial health. Francis even runs a non-profit organization with the same women/financial empowerment mission in mind, called Savvy Ladies. Yet, it is alleged that neither Francis Financial nor Francis protected the elderly widow Kraus in this disheartening story, instead it is alleged she looked the other way for years due to her personal and investment advisor relationships with the son’s girlfriend, Courtney Barr. Francis Financial was the sole RIA charged with overseeing and managing Kraus’ Francis Financial accounts custodied by Schwab. As an SEC registered RIA, Francis Financial owed Kraus fiduciary duties of loyalty and care, but instead ignored red flags and blindly carried out the requests of a securities-industry-barred individual to crack open and consume his mother’s nest egg.
Schwab is a national financial institution registered as a FINRA broker-dealer and an SEC RIA. Schwab custodied Kraus’ funds at issue that were managed by Francis Financial. Custodians are responsible for safeguarding client assets, following elder financial exploitation laws and rules, as well as providing account reporting internally and externally to the client and investment advisor – here Francis Financial. Schwab had ongoing access to Kraus’ accounts and to her investment advisor. Schwab’s very own account statements illustrate the hundreds of thousands of dollars leaving its custody almost every month. Yet Schwab apparently took no affirmative action to protect Kraus or to stop the bleeding, although it was permitted to query other financial institutions, report it to the state, contact family members that were “non-thieving” and pause the transactions (all actions available to all three firms and Ms. Francis). They also were permitted to speak with one another, but it seems that never happened.
As alleged in the Statement of Claim, multiple times a month for four years, in 101 transactions, Mr. Graham withdrew large sums of money from individual and IRA accounts and transferred them through the conduits, including: 71 transactions of $100,000 exactly, 1 transaction of $90,000 exactly, 1 transaction of $80,000 exactly, 1 transaction of $60,000 exactly, 16 transactions of $50,000 exactly, 1 transaction of $45,000 exactly, 3 transactions of $40,000 exactly, 1 transaction of $35,000 exactly, 3 transactions of $25,000 exactly, 1 transaction of $15,000 exactly, 1 transaction of $4,000 exactly, and 1 transaction of $3,000 exactly – for 101 transactions totaling $8,427,000. It is alleged the financial institutions that could have stopped this money laundering and wire fraud were all asleep at the switch, failing Ms. Kraus completely.
Kraus maintains she was a client of JPMS’s related “Private Client” group with affiliate partner JPMCB, where she had FINRA licensed professionals assigned to her accounts and a personalized relationship at all relevant times. Seemingly no one noticed or escalated concerns, even though they had access to her accounts at all times and she frequented the same branch in the Upper East Side for years. Graham treated the JPMS and Francis Financial accounts custodied at Schwab as a conduit to his own personal accounts. He would transfer funds out of Francis Financial/Schwab to Mr. Kraus’ JPMS accounts, and then out again to himself at First Republic (which became part of the JPM brand in this period). Inflows and outflows were continuous and repetitive, in large round number sums that bore no relation to Ms. Kraus’ habits, needs or expenses, as well as were sent to Graham – a not-same-name recipient. This rapid money movement – a sign of money laundering – was apparently neither detected nor prevented. JPMS and JPMBC have global systems in place across the brand. See JPM’s website RE: “Global Financial Crimes Compliance” https://www.jpmorganchase.com/legal/global-financial-crimes-compliance
Interestingly, in 2020, Kraus had over 100 unauthorized donations sent from one of her JPMS related accounts to a political organization, ActBlue. In a New York Times article relating to this issue, Graham was quoted as saying, “This is a systemic campaign finance abuse issue.” He further indicated that the “overlapping pattern of giving was ‘not what a human being would do.’” Ironically, the Department of Justice plea shows he was simultaneously engaging in his own fraudulent “pattern” on a much bigger scale from his mother to himself. At the same time, JPM was actually in the account reviewing those transactions – proverbially tripping over millions of dollars of withdrawals to pick up pennies of ACH withdrawals in the same account at the same time.
According to the Statement of Claim, together these firms effectively enabled Graham to transfer, withdraw, and convert hundreds of thousands of dollars per month through the accounts they monitored and supervised, with the last destination being his own account at First Republic (bought in this period by JPM), not in his mother’s name. He continued to shamelessly take grand trips and post on social media, while draining his mother’s life savings.
Elder Financial Exploitation is On a Rise
According to the National Council on Aging (NCA), upwards of $28 billion per year is lost by seniors who fall victim to financial abuse and exploitation. Studies show that nearly one in five seniors will fall victim to financial abuse, although the real number is likely higher because many victims do not report due to embarrassment or shame. While some senior abuse scams are perpetrated by third party criminal organizations, studies have found that over half of elder financial fraud is carried out by a family member of the senior victim. Research published by the Federal Government also indicates that individuals who suffer from dementia, Alzheimer’s, and other forms of cognitive decline are more susceptible to being victimized by financial abuse. When elder financial exploitation occurs, chances are it was perpetrated by a family member of a cognitively impaired senior. Given these occurrences, it is incumbent on financial institutions to be vigilant in protecting senior investors.
The prevention of elder financial exploitation has been top of mind for regulators and states for years, begging the question – why didn’t these firms act in the face of blatant red flags? In 2018, the Senior Safe Act went into effect, which promotes reporting of suspected elder financial abuse by financial institutions who report instances to relevant authorities. The North American Securities Administrators Association has also developed a model act designed to prevent the financial exploitation of vulnerable adults, which has been adopted in part or in full by over 40 states. In recent years, FINRA has also implemented new rules designed to curb senior financial fraud, such as FINRA 2165 and FINRA 4512. FINRA 2165 permits firms to place temporary holds on accounts when financial exploitation is suspected, and FINRA 4512.06 authorizes firms to disclose account information to a trusted contact person associated with a customer’s account. Despite these protections, financial firms, including JPMS, Schwab, and Francis Financial, seem to be dropping the ball when it comes to protecting the nation’s seniors against financial exploitation and such firms must be held accountable for such failures. Goodness forbid that any institution hold themselves accountable, but at Malecki Law, our Manhattan-based financial senior fraud lawyers will work to force them to be accountable.