8 ms·

He Blew the Whistle at JPMorgan Chase, Then Came the Blowback

173 points by phonon 11y ago

mirimir 11y ago
It is wonderful when honest people are vindicated.
elecengin 11y ago
I think it's important to recognize that all this happened on the fringes of JPM - this appears to be some private wealth branch office. Small brokerage outposts like this are generally rife with issues - they have less supervision (frequently a single broker with their supervisory license) and even in better supervised conditions brokers spend the majority of time out of the office and away from the eye of compliance. Compounding the issue is older brokers who are used to different norms in the business - which explain some of his complaints on the broker's FINRA record: more aggressive selling (his suitability complaints), phone orders (the late order entry complaint), etc. Even though he was vindicated, this type of record is common for brokers in these roles. I suspect that is why they chose these specific trumped up charges against him. I am waiting for the article that tackles the issues at these branch offices head on.
- leereeves 11y ago
  Is it really limited to the branch offices? Over the years, JP Morgan has been fined $35 billion. http://www.dividend.com/dividend-education/a-brief-history-of-jp-morgans-massive-fines-jpm/ http://www.dividend.com/dividend-education/a-brief-history-o... And that's just for the cases the government caught and proved.
  - HiLo 11y ago
    Some of those things have been for things that weren't even illegal. The dance between Wall St and regulators is a delicate one, and shouldn't really be viewed in the same way as your everyday civil case.
    - leereeves 11y ago
      Which were for things that weren't illegal?
    - RodericDay 11y ago
      They also probably haven't been fined for things that actually should be illegal, just because it's hard to write regulation that captures otherwise obvious ill-intent. I honestly will never understand this kind of apologia.
  - JackFr 11y ago
    > And that's just for the cases the government caught and proved. "caught and proved" can also be read as "alleged and settled". In virtually every one of those cases, nothing was "proved" in a court of law. Allegations were made, and JP Morgan agreed to a settlement. They are certainly not guiltless, but it is far less cut and dried than you make it out to be.
    - littletimmy 11y ago
      Please stop with this nonsense apologia. If JP Morgan was not guilty it would fight at least one of these many cases in court. Virtually every time they settle, which means they are either guilty or the settlements are so low that they don't matter.
      - roel_v 11y ago
        Lol, just like all those other people who are offered plea bargains and take them? They all guilty, right, otherwise they'd fight in court?
        throwaway2048 11y ago
        i somehow doubt jp morgan lacks the means to fight them
        littletimmy 11y ago
        You mean to say JP Morgan is appointed a lowly paid public defender and intimidated into a plea deal?
    - steven2012 11y ago
      This is nonsense. $35B is certainly enough money to stop and fight for, if they thought otherwise. The idea that "nothing was proven" is preposterous, they are certainly guilty not just "not guiltless".
      - cmdkeen 11y ago
  - throwsaway2456 11y ago
    And there are still investigations ongoing! Once they close the case on bad-doings in one market sector, they then find they were doing the same in another! Pay the fine for LIBOR. What? They were involved in the FX issue too? Get them back in with the check book again. The people would really like to see the firms not get away with paying fines of pennies on the dollar of the profits of bad actions.
- HiLo 11y ago
  This is a good point. Professional firms where the company is really tons of smaller companies sharing a balance sheet are always tough to wrap your head around in general.
- nickbauman 11y ago
  Maybe related: A top salesperson's commissions often makes them one of the highest paid persons in the org chart. Upper management always ends up thinking they can be replaced with cheaper people. So it gets very classically political.
  - johnz133 11y ago
    Can confirm. Friend of mine was cut out of a seven figure bonus weeks before the payout. Apparently he had no recourse legally either.
  - tankenmate 11y ago
    And it's not just salespeople, a number of early stage engineers at Zynga were cut out of their equity / options entitlements by being relieved of duty just before the IPO; "got to be in it to win it" clauses in their employment contracts enabled this. Point in lesson, always make sure accelerated vesting (equity, options, bonuses) clauses for not at fault firing, retrenchment, redundancy are in your employment contract.
- NickHaflinger 11y ago
  "I think it's important to recognize that all this happened on the fringes of JPM" Disingenuous excusing :)
- wealthmanager6 11y ago
  Valid point except I worked at the largest wealth management firm in the world in a major office. Cocaine, hookers, money launderering, investment in drugs, executives selling (small amounts) of drugs and all kinds of related craziness. People are people, and we are a flawed bunch.
  - sharemywin 11y ago
    you should have said and that's just the shit I did...you should have seen the crazy shit the other people were doing...lol...
    - sharemywin 11y ago
      no sense of humor.
jstoiko 11y ago
> That may mean a big payday for Mr. Burris. If the S.E.C. deems he gave it “original information” the leads to a successful enforcement action, he ... would be entitled to a bounty of ... $20 million to $60 million. I wasn't aware the S.E.C. had a bounty program in place. That's quite the amount, probably more than he could have made in a lifetime at JP Morgan.
- d_t_w 11y ago
  The IRS have something similar, Bradley Birkenfeld received more than $100M when he blew the whistle against UBS. https://en.wikipedia.org/wiki/Bradley_Birkenfeld https://en.wikipedia.org/wiki/Bradley_Birkenfeld
LeoardoDavinci1 11y ago
It still amazes me how people have absolutely no problem stealing or screwing people. I mean, no guilt whatsoever. If you look at the history of how a lot of people have made their money many of them have accumulated their money by methods that I would consider theft (or screwing people) even if technically legal. The robber barons provide rich evidence of what I'm talking about. Even in current times you can find them, although no longer called such.
- gnaritas 11y ago
  Guilt is not problem everyone suffers from. Some only behave just well enough to avoid criminal trouble. They have no problem separating a fool from his money, what you label as "screwing people".
  - jondubois 11y ago
    Since this is tax evasion, the 'fool' you are referring to in this scenario is basically any honest American taxpayer. Those honest tax payers are the ones who are funding transport, education, healthcare, infrastructure, subsidies and welfare in America and are therefore making the world a better place for everyone. There is a huge difference between being a fool vs being misinformed. It's sick how some people in this society can equate 'honesty' with 'foolishness'. Honesty is the fabric which holds our society together.
    - puredemo 11y ago
      Another way of looking at this is these executives didn't necessarily agree to the "social contract," they were simply born into it. There is frequently a rather pervasive attitude that life is competition and any rules were made to be broken. Also, many would disagree that welfare makes the "world better for everyone." A more competitive outlook would say welfare simply encourages dysgenics on a massive scale and multiplies problems.
      - mirimir 11y ago
deleted 11y ago
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deleted 11y ago
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wsha 11y ago
I was hoping for a nice outrage inducing story, but this one left too much ambiguity about who was really at fault for me.
- NotSammyHagar 11y ago
  If you see this as ambiguous, then you are either seriously impaired or perhaps working for jpmorgan. After he quit and filed a complaint against jpmorgn, jpmorgan created three false complaints against the former employee. Then basically lied about it. They are about to pay a $200 million fine for what he alleged they were doing. jpmorgan is all wrong here.
  - firloop 11y ago
    Your comment would be much nicer without the first sentence.
ionised 11y ago
The capacity and willingness of financial institutions to completely fuck everyone over repeatedly and consistently must be a universal constant at this point.
JustSomeNobody 11y ago
"Then Mr. Burris’s lawyer asked — twice — whether “someone at JPMorgan” had written them. Ms. Kazmi testified, “absolutely not.”" ... "And, with respect to Ms. Kazmi’s testimony that no one at JPMorgan had drafted the letters, she “answered truthfully based on what she knew — she did not realize that anyone had provided the customer with the courtesy of typing up a verbal complaint or issue,” Ms. Wexler said." Absolutely is a definitive. It means you DO know.

173 points by phonon 11y ago

It is wonderful when honest people are vindicated.

I think it's important to recognize that all this happened on the fringes of JPM - this appears to be some private wealth branch office. Small brokerage outposts like this are generally rife with issues - they have less supervision (frequently a single broker with their supervisory license) and even in better supervised conditions brokers spend the majority of time out of the office and away from the eye of compliance. Compounding the issue is older brokers who are used to different norms in the business - which explain some of his complaints on the broker's FINRA record: more aggressive selling (his suitability complaints), phone orders (the late order entry complaint), etc. Even though he was vindicated, this type of record is common for brokers in these roles. I suspect that is why they chose these specific trumped up charges against him. I am waiting for the article that tackles the issues at these branch offices head on.

leereeves 11y ago
Is it really limited to the branch offices? Over the years, JP Morgan has been fined $35 billion. http://www.dividend.com/dividend-education/a-brief-history-of-jp-morgans-massive-fines-jpm/ http://www.dividend.com/dividend-education/a-brief-history-o... And that's just for the cases the government caught and proved.
- HiLo 11y ago
  Some of those things have been for things that weren't even illegal. The dance between Wall St and regulators is a delicate one, and shouldn't really be viewed in the same way as your everyday civil case.
  - leereeves 11y ago
    Which were for things that weren't illegal?
  - RodericDay 11y ago
    They also probably haven't been fined for things that actually should be illegal, just because it's hard to write regulation that captures otherwise obvious ill-intent. I honestly will never understand this kind of apologia.
- JackFr 11y ago
  > And that's just for the cases the government caught and proved. "caught and proved" can also be read as "alleged and settled". In virtually every one of those cases, nothing was "proved" in a court of law. Allegations were made, and JP Morgan agreed to a settlement. They are certainly not guiltless, but it is far less cut and dried than you make it out to be.
  - littletimmy 11y ago
    Please stop with this nonsense apologia. If JP Morgan was not guilty it would fight at least one of these many cases in court. Virtually every time they settle, which means they are either guilty or the settlements are so low that they don't matter.
    - roel_v 11y ago
      Lol, just like all those other people who are offered plea bargains and take them? They all guilty, right, otherwise they'd fight in court?
      - throwaway2048 11y ago
        i somehow doubt jp morgan lacks the means to fight them
      - littletimmy 11y ago
        You mean to say JP Morgan is appointed a lowly paid public defender and intimidated into a plea deal?
  - steven2012 11y ago
    This is nonsense. $35B is certainly enough money to stop and fight for, if they thought otherwise. The idea that "nothing was proven" is preposterous, they are certainly guilty not just "not guiltless".
    - cmdkeen 11y ago
- throwsaway2456 11y ago
  And there are still investigations ongoing! Once they close the case on bad-doings in one market sector, they then find they were doing the same in another! Pay the fine for LIBOR. What? They were involved in the FX issue too? Get them back in with the check book again. The people would really like to see the firms not get away with paying fines of pennies on the dollar of the profits of bad actions.
HiLo 11y ago
This is a good point. Professional firms where the company is really tons of smaller companies sharing a balance sheet are always tough to wrap your head around in general.
nickbauman 11y ago
Maybe related: A top salesperson's commissions often makes them one of the highest paid persons in the org chart. Upper management always ends up thinking they can be replaced with cheaper people. So it gets very classically political.
- johnz133 11y ago
  Can confirm. Friend of mine was cut out of a seven figure bonus weeks before the payout. Apparently he had no recourse legally either.
- tankenmate 11y ago
  And it's not just salespeople, a number of early stage engineers at Zynga were cut out of their equity / options entitlements by being relieved of duty just before the IPO; "got to be in it to win it" clauses in their employment contracts enabled this. Point in lesson, always make sure accelerated vesting (equity, options, bonuses) clauses for not at fault firing, retrenchment, redundancy are in your employment contract.
NickHaflinger 11y ago
"I think it's important to recognize that all this happened on the fringes of JPM" Disingenuous excusing :)
wealthmanager6 11y ago
Valid point except I worked at the largest wealth management firm in the world in a major office. Cocaine, hookers, money launderering, investment in drugs, executives selling (small amounts) of drugs and all kinds of related craziness. People are people, and we are a flawed bunch.
- sharemywin 11y ago
  you should have said and that's just the shit I did...you should have seen the crazy shit the other people were doing...lol...
  - sharemywin 11y ago
    no sense of humor.

jstoiko 11y ago

> That may mean a big payday for Mr. Burris. If the S.E.C. deems he gave it “original information” the leads to a successful enforcement action, he ... would be entitled to a bounty of ... $20 million to $60 million. I wasn't aware the S.E.C. had a bounty program in place. That's quite the amount, probably more than he could have made in a lifetime at JP Morgan.

d_t_w 11y ago
The IRS have something similar, Bradley Birkenfeld received more than $100M when he blew the whistle against UBS. https://en.wikipedia.org/wiki/Bradley_Birkenfeld https://en.wikipedia.org/wiki/Bradley_Birkenfeld

LeoardoDavinci1 11y ago

It still amazes me how people have absolutely no problem stealing or screwing people. I mean, no guilt whatsoever. If you look at the history of how a lot of people have made their money many of them have accumulated their money by methods that I would consider theft (or screwing people) even if technically legal. The robber barons provide rich evidence of what I'm talking about. Even in current times you can find them, although no longer called such.

gnaritas 11y ago
Guilt is not problem everyone suffers from. Some only behave just well enough to avoid criminal trouble. They have no problem separating a fool from his money, what you label as "screwing people".
- jondubois 11y ago
  Since this is tax evasion, the 'fool' you are referring to in this scenario is basically any honest American taxpayer. Those honest tax payers are the ones who are funding transport, education, healthcare, infrastructure, subsidies and welfare in America and are therefore making the world a better place for everyone. There is a huge difference between being a fool vs being misinformed. It's sick how some people in this society can equate 'honesty' with 'foolishness'. Honesty is the fabric which holds our society together.
  - puredemo 11y ago
    Another way of looking at this is these executives didn't necessarily agree to the "social contract," they were simply born into it. There is frequently a rather pervasive attitude that life is competition and any rules were made to be broken. Also, many would disagree that welfare makes the "world better for everyone." A more competitive outlook would say welfare simply encourages dysgenics on a massive scale and multiplies problems.
    - mirimir 11y ago

deleted 11y ago

[deleted]

deleted 11y ago

[deleted]

wsha 11y ago

I was hoping for a nice outrage inducing story, but this one left too much ambiguity about who was really at fault for me.

NotSammyHagar 11y ago
If you see this as ambiguous, then you are either seriously impaired or perhaps working for jpmorgan. After he quit and filed a complaint against jpmorgn, jpmorgan created three false complaints against the former employee. Then basically lied about it. They are about to pay a $200 million fine for what he alleged they were doing. jpmorgan is all wrong here.
- firloop 11y ago
  Your comment would be much nicer without the first sentence.

ionised 11y ago

The capacity and willingness of financial institutions to completely fuck everyone over repeatedly and consistently must be a universal constant at this point.

JustSomeNobody 11y ago

"Then Mr. Burris’s lawyer asked — twice — whether “someone at JPMorgan” had written them. Ms. Kazmi testified, “absolutely not.”" ... "And, with respect to Ms. Kazmi’s testimony that no one at JPMorgan had drafted the letters, she “answered truthfully based on what she knew — she did not realize that anyone had provided the customer with the courtesy of typing up a verbal complaint or issue,” Ms. Wexler said." Absolutely is a definitive. It means you DO know.