JPMorgan owes 2 years' salary to fired private banker

JPMorgan's wealth unit has to pay a former employee the equivalent of two years' salary after firing him over allegations that he made a false claim to incentives for bringing on clients' money.

A Financial Industry Regulatory Authority arbitrator on Tuesday ordered JPMorgan's wealth management unit, J.P. Morgan Securities, to pay $363,200 plus interest for back wages to Evan Becht, a former private client banker who lost his job in 2023. According to a lengthy explanation of her decision, arbitrator Andrea Goldman found that Becht was fired as the result of a "woefully inadequate" internal investigation. Becht, according to Goldman, has been haunted for the past two years by a legally required disclosure of his employment termination on FINRA's BrokerCheck page and unable to find work at another firm.

Goldman's arbitration award was based on estimations of how much Becht would have made had he stayed employed at JPMorgan. Goldman also ordered JPMorgan to pay $50,000 and called for his BrokerCheck page to be changed to say merely that he was "Terminated by affiliate bank."

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The page now contains additional language stating: "Registered representative, in the capacity of an affiliate bank employee, was terminated for submitting affiliate bank upsell credit that he was not entitled to receive; and entering into an internal bank system inaccurate notes related to customer contact. No known customer harm at the time of filing."

A spokesperson for JPMorgan said, "We strongly disagree with this decision and are exploring our options as to next steps."

According to Goldman's lengthy explanation of her award, Becht's trouble began with a wealthy bank customer. Becht and other employees of the branch where he worked were under pressure to refer clients over to JPMorgan financial advisors rather than try to sell them banking products like certificates of deposit, Goldman wrote.

But after expressing interest in CDs, the wealthy client eventually moved over $2 million to JPMorgan. Becht said he had played a role in persuading her to transfer the money and that he was therefore entitled to an "upsell credit" used to reward JPMorgan employees who get their clients to bring in assets.

"It should be noted that this credit would have amounted to approximately $1,000.00 to Becht, which was not significant given that he was making $3-5000/month in credits or bonuses," Goldman wrote.

But Becht's manager, only identified by the initials AH, questioned whether an upsell credit was really warranted. Conducting an investigation, she found a note Becht had made indicating he had been on a call on March 14 with both the wealthy client and his advisor colleague.

The advisor said he did not remember Becht being on the line. The manager, according to Goldman, concluded that Becht was lying and wrote "a scathing letter to Human Resources, questioning his integrity."

"Bottom line is that he is trying to manipulate the incentive plan and in addition to that is falsifying notes," the manager wrote.

Becht was fired about a month and a half later. Goldman said he has applied for at least 100 jobs since. He initially received offers for eight. But those were later rescinded after the employers performed background checks and discovered the information on his BrokerCheck page. Goldman said Becht is now $50,000 in debt, has no health insurance and was forced to go back to living with his parents.

Goldman cited various flaws in Becht's manager's attempt to investigate his claim for an upsell credit. The manager, for instance, did not mention in her note to the firm's human resources department that Becht had sent many emails to the wealthy client. Becht, according to Goldman, also presented a spreadsheet during arbitration showing he had made a separate phone call to the client on March 14, 2023.

"It is astonishing to me that an excellent employee would be fired for one ambiguous entry over the course of his tenure at the bank," Goldman wrote. "He never even received a warning."

Bill Singer, a securities lawyer and retired author of the Broke and Broker blog, said Becht's case "pitted a lowly, young, newbie who was largely toiling away" at JPMorgan "against an industry powerhouse." Singer said Becht appears to have been fired even though there were "no customer complaints and no allegations of any misconduct that truly warranted an outright termination."

"Every so often," Singer said, "a FINRA arbitrator fully appreciates the human carnage created by an unfair termination, and finds that a former employer went too far in weaponizing defamatory language" on BrokerCheck.

— This article has been updated with a quote from an industry lawyer.