A former investment adviser for JPMorgan Chase was arrested Thursday on charges he stole some $20 million from clients and put most of the money into losing investments, US authorities said.
Michael Oppenheim, 48, an employee of JPMorgan from 2002 through mid-March, faces federal criminal charges of embezzlement and fraud in the alleged scheme.
The former New York City-based investment adviser and broker advised 500 clients of the largest US bank by assets, most of whom were high net worth, according to a Securities and Exchange Commission complaint filing parallel fraud charges.
In some cases, Oppenheim took funds from accounts without the investors' knowledge, authorities alleged.
In other instances, Oppenheim induced clients to withdraw hundreds of thousands, or millions, of dollars under the guise that he would invest the funds in low-risk municipal bonds.
Instead, Oppenheim traded stocks and options for such companies as Apple, Google and Netflix. Oppenheim typically lost the entire amount of each deposit, they said.
"Investment advisers are required to act in the best interest of their clients," said FBI assistant director-in-charge Diego Rodriguez.
"Oppenheim did just the opposite by allegedly taking advantage of those who trusted him. As alleged, he concealed their money in a game of hide-and-seek and personally benefitted from illegitimately obtained profits.
"Now that his actions have been exposed, he will be made to face the consequences of the justice system."
Oppenheim continued the fraud until he was fired by JPMorgan in March, the Justice Department said.
The bank, which had alerted authorities about the case, expressed regret for the incident.
"We are sorry and angry this happened," said a JPMorgan spokesman. "We always stand by our customers and will ensure no customer who had their money stolen will lose any funds related to this."