By Pam Martens and Russ Martens: November 22, 2021 ~
We have been reading lawsuits filed against Wall Street firms in the federal district court in the Southern District of New York for more than three decades. We didn’t think that we could still be shocked by what victims of Wall Street’s abuses tell the court. But the lawsuit filed on November 11 by Shaquala Williams against JPMorgan Chase contains allegations that are both stunning and unprecedented in our experience.
Williams is an attorney who formerly worked in compliance at JPMorgan Chase. Part of her role was to make sure that the bank was in compliance with a non-prosecution agreement it had signed with the Justice Department in 2016.
The Justice Department had charged in 2016 that JPMorgan’s Asia subsidiary had engaged in quid pro quo agreements with Chinese officials to obtain investment-banking business and had falsified internal documents to cover up the activities. The quid pro quo agreements boiled down to the bank putting the children of high Chinese government officials on its payroll in order to further its business interests in China.
In exchange for avoiding prosecution, the Justice Department required the bank to put in place stringent compliance controls around third-party payments. Williams alleges, among numerous other serious charges, that the so-called third-party payment controls were a sham and that when she blew the whistle to her superiors at the bank, JPMorgan Chase retaliated against her by firing her in October 2019.
The lawsuit uses the term “TPI” for Third-Party Intermediaries and defines it as follows:
“Third Party Intermediaries (‘TPI’): The purported purpose of JPMorgan’s TPI program was to detect, prevent, and deter JPMorgan personnel and non-client third parties such as agents, consultants, vendors, and suppliers, from engaging in corrupt behavior to obtain or secure business or government action on the Bank’s behalf.”
One of these third parties is called TPI1, who is described by Williams as follows:
“…a former government official (‘TPI1’) was a high risk JPMorgan third-party intermediary for Jamie Dimon (‘Dimon’), JPMorgan’s Chief Executive Officer. The Bank processed the invoices for TPI1 through the ‘emergency payment method.’ The Bank’s policies made clear that the ‘emergency payment method’ should be used for urgent payments critical to the day-to-day operations of Chase such as emergency utility bills ‘to prevent the lights from going out.’ The TPI1 invoices did not satisfy this standard, thus leaving the payment method open to unchecked corrupt payments and violations of the Bank’s accounting controls, the NPA [non-prosecution agreement], SEC Order, SEC rules and regulations, and provisions of Federal law relating to fraud against shareholders. Further, the payments as reflected in the general ledger did not correspond with management’s general or specific authorization for the invoice payments, thereby creating inaccurate records that also constituted violations of the NPA, the SEC Order, SEC rules and regulations and/or provisions of Federal law relating to fraud against shareholders.”
It’s not clear if TPI1 refers to a U.S. “former government official” or a foreign former government official. It’s also not clear what is meant by this person being a “third-party intermediary for Jamie Dimon.” What would a former government official, regardless of what country he’s from, be doing working directly for Jamie Dimon? Public relations work? Lobbying? Conducting investigations of whistleblowers? The possibilities are endless and certainly worthy of press coverage from mainstream media – which has totally ignored this smoking gun in the lawsuit.
We asked Williams’ attorneys to elaborate on this section of the lawsuit but received no response.
If these allegations are proven, Jamie Dimon could be in very serious trouble. That’s because the 2016 non-prosecution agreement with the Justice Department required that Dimon, as CEO of JPMorgan Chase, had to certify no later than December 2019, that the bank had met its compliance obligations under the agreement.
The relevant part of the Justice Department’s November 17, 2016 non-prosecution agreement with JPMorgan Chase reads as follows:
“In addition, during the Term of the Agreement, should the Company or JPMC learn of credible evidence or allegations of actual or potentially corrupt payments, false books, records, and accounts, or the failure to implement adequate internal accounting controls, the Company or JPMC shall promptly report such evidence or allegations to the Offices [the ‘Offices’ are defined as the Department of Justice Criminal Division and the U.S. Attorney’s Office for the Eastern District of New York]. No later than thirty (30) days after the expiration of the Term of this Agreement, the Company, by the Chief Executive Officer of the Company, will certify to the Offices that the Company has met its disclosure obligations pursuant to this Agreement. Such certification will be deemed a material statement and representation by the Company to the executive branch of the United States for purposes of 18 U.S.C. § 1001.”
Raising more eyebrows in this case, the court initially assigned Judge Andrew Carter to the case. But quietly, on November 16, the case was reassigned to Judge Jed Rakoff, who curiously seems to land on a lot of JPMorgan Chase cases, ruling in favor of the bank in many high-profile cases. (See here and here.)
Williams is being represented by Kathleen Riley and Jeremiach Iadevaia of Vladeck Raskin & Clark, a 70-year-old labor law firm in Manhattan. The case number is: 1:21-cv-09326. Defense counsel is not yet listed on the docket.