- Former manager claims bank violated Sarbanes-Oxley in firing
- Appeals court overturns judge second time, bank must face suit
A whistle-blower lawsuit claiming JPMorgan Chase & Co. fired a wealth manager for reporting a client’s possible illegal behavior was revived for a second time by a federal appeals court.
The New York court on Monday reversed a judge’s decision to throw out the lawsuit and ordered him to consider the case. Jennifer Sharkey sued in 2010 claiming she was fired as a vice president in J.P. Morgan’s Private Wealth Management Group for investigating allegations that a long-term client might be involved in fraud or money-laundering.
According to Sharkey, she was fired one week after making a formal recommendation that the bank end its relationship with the Israeli client after spending months warning about possible illegal activity. The person wasn’t named in the lawsuit and is referred to in court papers as "Client A."
Client A was a 20-year customer of JPMorgan Chase, with income from the gem and diamond business, real estate, telecommunications, medical technology and pre-paid calling cards, according to court papers. Sharkey told superiors the client’s businesses, multiple bank accounts and failure to provide information necessary to satisfy the bank’s "Know Your Customer" requirements raised questions that should result in terminating his relationship with the bank.
Sharkey sued the bank and three supervisors in 2010, claiming they violated whistle-blower protections in the 2002 Sarbanes-Oxley Act. Monday’s ruling is the second time the New York appeals court has overturned rulings by U.S. District Judge Robert Sweet throwing out the case.
"We are very pleased with the Second Circuit’s decision and we look forward to a trial before the district court," said Lawrence Pearson, Sharkey’s lawyer.
The bank claims Sharkey was fired for lying to a superior about communicating with a different client and for poor performance, which Sharkey disputes.
"We continue to believe this case is without merit and look forward to the opportunity to present our case to the court," JPMorgan Chase spokesman Darin Oduyoye said.
JPMorgan Chase has previously agreed to pay more than $2.5 billion in penalties and settlements to resolve claims it failed to adequately oversee accounts that Bernard Madoff used in his Ponzi scheme.
The case is Sharkey v. JPMorgan Chase & Co., 15-3400, U.S. Court of Appeals for the Second Circuit (Manhattan).