Dismissal of Whistleblower Lawsuit Won by JPMorgan
On Friday October 15, 2015, JPMorgan Chase won the dismissal of a lawsuit filed by a whistleblower, the former vice president of the financial institution, Jennifer Sharkey. In the suit Sharkey alleged that obvious red flags were ignored by the bank that indicated potential fraud being perpetrated by a client of the bank. It was alleged that the bank ignored Sharkey’s warnings even after the public had already been apprised of Bernie Madoff’s Ponzi scheme.
JPMorgan Moves to Have the Case Dismissed
JPMorgan’s motion to dismiss the complaint was granted by U.S. District Judge Robert Sweet. This was based on the finding that Sharkey was not able to demonstrate retaliation by the bank in its decision to dismiss her after she publically spoke out. The reason the case was thrown out of court is because the bank was able to substantiate that she was fired because of issues related to performance when she was dismissed in August 2009.
Sharkey’s Attorney States Intention to File an Appeal
According to Lawrence Pearson, Sharkey’s attorney, they would be filing an appeal. JPMorgan, although they had denied Sharkey’s allegations in the past would not offer a comment after the decision was handed down. This decision is not the first time Judge Sweet dismissed the lawsuit but actually the second time he has thrown it out. Sweet had previously ruled that Sharkey did not meet the standards set forth in the 2002 Sarbanes-Oxley Act that defined how whistleblowers would be protected. Sweet’s previous ruling came in December 2013.
Standards Defining Whistleblower Lowered in 2014
As the result of another totally unrelated 2014 case, a lower bar was established by the 2nd U.S. Court of Appeals which lowered the requirements needed to be protected as a whistleblower under this Act. The court then proceeded to reverse the decision by Sweet and ordered him to consider again whether or not Sharkey should be allowed to present her case under the new standards that are much more lenient. Even with these less restrictive measures, Sweet said the case should again be dismissed.
Concerns of Money Laundering First Voiced in January 2009
In January 2009 Sharkey began voicing concerns that an Israeli client was engaged in the laundering of money which involved Columbia. This was just short weeks after the multibillion dollar Ponzi scheme of Madoff’s was exposed. The court papers did not identify the Israeli client. At the time, Madoff had been a client of the bank for two decades and had sent approximately $150 billion in transfers and deposits through the bank from his investors.
Amidst allegations that JPMorgan had failed to alert the proper authorities of their suspicions that Madoff’s firm was involved in fraudulent activities, JPMorgan did agree to pay the United States government and victims of Madoff a settlement amounting to $2.6 billion. The case in question is listed as Sharkey v JPMorgan Chase & Co et al, U.S. District Court for the Southern District of New York, No. 10-3824.