Fired JP Morgan Whistleblower Wins Wrongful Dismissal Claim
(Updated with comments from a JP Morgan spokesman.)
The Labor Department has ordered JP Morgan Chase & Co. to pay former broker Johnny Burris more than $150,000 for firing him and creating fictitious client complaints in his U5 termination file after he objected to pressure to sell proprietary managed accounts.
An investigator at the Occupational Safety and Health Administration informed Burris Tuesday that the regulator has ordered the bank to expunge its record of his termination and pay him $64,500 for four months of back-pay plus interest as well as $100,000 of damages for harming his reputation and creating pain and suffering.
It also must pay him his unspecified 2012 bonus, cover his lawyers’ fees and affirm that it will not retaliate or discriminate against whistleblowing employees.
Burris’s said that JPMorgan pressured brokers to sell proprietary mutual funds and, as the case unfolded, about him. The aggressive proprietary sales practices involved JP Morgan Private Bank Managed Accounts, Chase Strategic Portfolio Managed Accounts and unspecified mutual funds, according to his complaint.
Burris, who was fired in November 2012 and now runs an eponymous registered investment advisory firm in Sun City, Ariz., said that he feels exonerated but that the decision should make people think twice before accepting a job with the biggest U.S. bank (as measured by market value).
“It’s clear JP Morgan has, and continues to, retaliate against whistleblowers,” he said in a prepared statement. “I also believe the firm uses FINRA Form U5 to retain client accounts. This unethical action must stop. There are a lot of people being harmed by the firm.”
The bank last year reached a $307 million settlement with the Securities and Exchange Commission and the Commodity Futures Trading Commission related to Burris’ proprietary product claims and to its failure to disclose sales contests and other incentives to customers. Burris has also filed a pending whistleblower complaint with the SEC entitling him to part of the settlement.
A spokesman for JPMorgan said in an emailed statement that the firm plans to appeal the OSHA finding.
“Mr. Burris previously raised these same claims to a Finra panel, with the same basic evidence, and the claims were denied,” he said. “We look forward to presenting our case in the next step of this process and putting this to rest.”
A Financial Industry Regulatory Authority arbitration panel in 2014 denied Burris’ wrongful termination claim and his request for expungement. Burris said the panel was influenced by written customer complaints that were fabricated by his former manager.
Finra in September recommended disciplinary action against that manager.
Burris, who was fired as a private client advisor in Sun City West, Ariz. in November 2012, filed his DOL complaint in April 2013 under the Sarbanes-Oxley Whistleblower Act. Passed in 2002, it protects employees from retaliation for reporting fraudulent accounting activities by corporations.
Subsequently, several former employees of JP Morgan and other banks have protested inaccurate termination filings that have allegedly dogged their ability to work as advisors.
Burris is himself battling a complaint from regulators. The Financial Industry Regulatory Authority last month charged that he did not disclose to JPMorgan failure to execute an order for an elderly couple that resulted in them paying a penalty to the Internal Revenue Service.
“I hope that in light of the decision by OSHA, Finra reconsiders their complaint,” Burris said in an interview.