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2017-01-12 15:12:17
JPMorgan Ordered to Pay Damages for Firing Whistle-Blower

JPMorgan Chase inappropriately retaliated against a former employee who raised questions about the bank’s sales tactics and investment products, the Labor Department found.

The bank was ordered to pay back wages and damages to Johnny Burris, a former broker at one of its Arizona branches. A letter released on Tuesday by the Occupational Safety and Health Administration, a division of the department, said that JPMorgan had violated provisions of the Sarbanes-Oxley law designed to protect whistle-blowers.

A spokeswoman for JPMorgan, Patricia Wexler, said the bank planned to appeal the findings. Ms. Wexler noted that the Financial Industry Regulatory Authority, the industry’s self-funded regulator, had previously ruled against Mr. Burris when he told an arbitration panel that he was fired as retaliation.

Mr. Burris was fired in late 2012 after resisting managers who were pressuring him to sell JPMorgan investment products that were not suitable — or were too risky — for his mostly elderly clients.

The Labor Department investigator said that the offenses that JPMorgan cited for firing Mr. Burris were, in some cases, based on “questionable evidence,” and that they were not enough, in normal circumstances, to get an employee fired.

The investigator wrote that the bank “did not follow its progressive disciplinary policy” and went “outside its normal disciplinary tract to terminate” Mr. Burris, apparently because of his complaints about the bank’s sales tactics.

In separate proceedings, the bank agreed in 2015 to pay $307 million to settle accusations that it had improperly steered clients to the company’s in-house investment funds, as Mr. Burris had argued. That settlement was with the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Mr. Burris complained about the sales tactics and his treatment by the bank in a 2013 story in The New York Times, and his problems continued after that.

Soon after the article appeared in the Times, Mr. Burris’s manager added several customer complaints to Mr. Burris’s regulatory record, despite the fact that he had left the bank many months earlier.

Some of these customers later told the Times that they had not had any concerns about Mr. Burris and that the complaints had been written by Mr. Burris’s manager.

Mr. Burris has said that because of the marks that his manager put on his records, he was unable to get hired by other firms.

The Occupational Safety and Health Administration inquiry found that Mr. Burris’s manager did indeed appear to act “inappropriately” in filing the complaints.

The Financial Industry Regulatory Authority said in a filing last fall that it was likely to bring disciplinary action against Mr. Burris’s manager for “creating misleading documents and making misleading statements.”

The letter this week ordered JPMorgan to pay Mr. Burris $64,462.03 in back wages and $100,000 in damages, along with his legal fees.

Mr. Burris said that he was happy his record would be cleared, as the investigator ordered, but that he did not think the finding went far enough in punishing JPMorgan.

“I am reviewing all options, including filing my case before the U.S. District Court to receive a trial by my peers,” he said.