Finra Files Enforcement Action Against JPMorgan Securities Whistleblower
A former JP Morgan Securities broker who claims the bank retaliated against him after he blew the lid on pressure to sell proprietary products is now facing regulatory action of his own.
The Financial Industry Regulatory Authority on Thursday charged Johnny Burris with failing to execute an elderly couple’s trade order and then attempting to resolve their complaints without informing his employer. The broker, whose testimony influenced JP Morgan Chase’s decision last year to make a $307 million settlement with regulators, was also accused of sending unauthorized letters using forged letterheads.
Burris failed to sell an elderly couple’s investment in a Franklin Templeton mutual fund in April 2012, leading the Internal Revenue Service to reject their $24,000 tax payment because of insufficient funds and to impose a $635 penalty. After the clients complained to Burris, he negotiated with them and the IRS without notifying JP Morgan, according to Finra’s disciplinary complaint, which seeks unspecified monetary sanctions.
Burris, who had been a top producer at the Sun City West, AZ, branch of JP Morgan Securities and a predecessor firm, admits that he made a trading error but contends that Finra’s action has been unduly influenced by the bank company that wants to retaliate further against him because of whistleblowing complaints he has filed.
“Finra is on the front line for JP Morgan,” Burris told AdvisorHub. “Behind the scenes, they’re being pushed really hard by JP Morgan.”
A Finra spokeswoman did not immediately respond, and a JP Morgan spokeswoman declined to comment.
Burris, who operates his own registered investment adviser, Burris Wealth Management, also denies Finra’s charges that he forged a letterhead on two outgoing letters to the clients and the IRS.
Burris, who was fired in November 2012 over the incidents, filed a whistleblower complaint with Finra that same month. The New York Times wrote a story in March 2013 about his charges that JPMorgan pressured brokers to sell proprietary mutual funds, and followed with a story about his accusations that the bank manufactured client complaints to damage his personal and professional reputation.
“The firm has provided false documents, false statements under oath, pretext for termination and a myriad of other problems for [whistleblowers],” Burris’ attorney, Robert D. Mitchell, wrote in a letter to Finra on August 1 in response to a Wells notice saying the regulator was likely to bring an enforcement action.
Burris said Finra is being pressured by JP Morgan to discredit him now because the Occupational Safety and Health Administration is expected to rule imminently on his request for protection against retaliation. He also contended that as one of Finra’s largest member firms, the bank has undue influence over the industry-financed self-regulator.
The complaint flies in the face of regulators’ efforts to encourage industry employees to report wrongdoing and also smacks of conflicts-of-interest since that many former and current Finra executives have worked at law firms that represent the bank, Mitchell has said.
“If the advisor has to look over his shoulder four years after making a whistleblower complaint, this case could hamper all future whistleblower complaints to Finra, the SEC or any other governmental agency,” he wrote in his response to Finra’s Wells notice in August.