JPMorgan Pushes for Reform Following $4 Million Deli Meat Verdict

Last month, JPMorgan Chase was ordered to pay $4.2 million in a wrongful-termination case.

The circumstances of the suit made headlines: broker Brent Ryan Bodner was fired for submitting an expense for a $642 deli platter, which he said was ordered for clients who never arrived for a scheduled meeting.

A Financial Industry Regulatory Authority (FINRA) arbitration panel sided with Bodner, and the litigation became known as “the salami incident.”

Now, the Wall Street Journal (WSJ) reported Tuesday (June 30), big banks want to make sure they are no longer vulnerable to cases like these.

JPMorgan, the report said, filed a motion late Monday in a California federal court seeking to vacate the award, saying it was “lawless” and misrepresented the reason for Bodner’s firing. The country’s largest bank also argued that Bodner took advantage of FINRA’s rules to engineer a heftier payout.

“FINRA exists to promote trust and confidence in the securities industry,” JPMorgan wrote in its filing, per the WSJ.

However, the filing continued, arbitrators punished the bank for “truthfully advising the investing community about Bodner’s misconduct, while rewarding a wrongdoer whose claims would fail as a matter of law in any other forum.”

The report notes FINRA had asked for public comment in March on questions related to its rules for deciding arbitration cases, leading to a flood of suggestions from the financial world. According to the WSJ, investor advocates and attorneys for brokers and advisors say changes to these rules could give Wall Street greater power.

In other banking news, PYMNTS wrote earlier this week about recent research showing why financial institutions continue to embrace partnerships with FinTechs even as such relationships become more complicated.

“More than half of credit unions surveyed said external partners help them innovate faster or at a greater scale than they could achieve on their own, while 61% cited faster implementation of new capabilities as the leading benefit of working with FinTechs,” the report said.

“Nearly 58% also pointed to stronger regulatory compliance and risk management, suggesting that partnerships increasingly serve operational as well as growth objectives.”

The research also found that collaboration has become an established part of tech planning and not just an occasional initiative. Only 0.6% of credit unions said they could innovate solely without outside partners, while close to two-thirds of “Early Launchers” reported that external providers significantly boosted the speed and scale of innovation.