JPMorgan Chase came face-to-face with allegations of “uniform and national” discrimination against black financial advisers, which resulted in the financial institution agreeing to pay six current and former employees $19.5 million in a settlement. The agreement also included the company establishing a $4.5 million fund for anti-bias programs, separate from the aforementioned $19 million.
Fortune reported last year that the details of the lawsuit included black financial advisers being assigned to “poorer bank branches, understaffing them, and failing to include them in a program for richer clients.”
JPMorgan Chase released a statement, “This eliminates the need for litigation, allowing us to continue our focus on the diverse and inclusive environment that is critical to our success.” And while the institution feels that the “need for litigation” has been eliminated, the validity of the accusations have been met with indisputable proof via a secret recording between JPMorgan Chase employees and a customer, which undoubtedly exposed their racist company practices.
The New York Times has released the recordings, one of which reveals Jimmy Kennedy, a former NFL defensive tackle, being given the runaround when he merely wanted to secure and invest his earnings – $800,000 to be more specific.
Kennedy tried to become at “private client,” with the institution, which would afford him a number of perks including “travel discounts, exclusive event invitations and better deals on loans.” He could not understand why he was met with so much reluctance, but he eventually received his answer. He was black.
Kennedy went to a branch in Arizona, where he relocated to after retiring from the NFL, and was told by employee, Charles Belton, who is black, “You’re bigger than the average person, period. And you’re also an African-American. We’re in Arizona. I don’t have to tell you about what the demographics are in Arizona. They don’t see people like you a lot.” Unbeknownst to Belton, Kennedy was recording their exchange.
Kennedy’s financial adviser, Ricardo Peters, had complaints of racial discrimination as well. Peters, who previously worked at JPMorgan and matriculated through the company from a salesman in the bank’s credit cards division to a financial adviser in Phoenix in 2016, also recorded an unsettling conversation. Peters was discussing a potential customer with his then-boss, Frank Venniro, after being accused of violating the bank’s code of conduct and being told to be aware of how his colleagues perceived him.
Peters voiced concerns that another adviser was trying to steal a prospective client; a black woman who had received a $372,000 wrongful death settlement after the loss of her son. Venniro’s response was chilling and dismissive. “You’ve got somebody who’s coming from Section 8, never had a nickel to spend, and now she’s got $400,000. What do you think’s going to happen with that money? It’s gone,” he said. And when Peters objected, Venniro refused to back down. He added, “You’re not investing a dime for this lady. It happens every single time. This is not money she respects. She didn’t earn it.”
The NY Times reports that Venniro was placed on leave after the company was questioned about his actions and resigned last Thursday.
Peters was transferred to a JPMorgan branch in a “less wealthy neighborhood” in February 2018. He considered this another example of managers flexing their racist muscles. Peters met Kennedy while working for his new branch and in the summer of 2018, the former NFL player gradually moved $800,000 to the bank. He was promised “private client” privileges, which was reserved for customers holding accounts with more than $250,000.
Although Peters should have been celebrating that he landed a client like Kennedy, his joy was curtailed. He was fearful of being targeted by his superiors, the site reports. He even filed a formal complain in August 2018, saying that he informed Venniro that he felt he was being discriminated against because of his race and skin color.
Ironically, JPMorgan Chase settled their discrimination lawsuit less than two weeks later.
However, Peters was fired two months later and when asked why, his boss, Venniro said in a recorded conversation, “I’m just given marching orders.” Apparently, the banking institution alleges that Peters’s firing was due to him assigning credit for a new client to an employee who managers didn’t think deserved it. He disputes these claims.
Peters now has his own advisory firm in Arizona.
Following his firing, though, Kennedy and his money were in limbo. Several of his transactions were frozen or not processed properly. ‘The Times’ pinpointed one particular instance where $92,000 of his money was supposed to go into a new investment product, but ended up in a holding account where the funds were not accessible to him. The explanation offered? It was an “administrative error.”
Kennedy was given a new advisor, Belton, who, as previously mentioned, explained why he was given the runaround about trying to become a private status client. Kennedy was under the impression that he had already received the status, but in secretly recorded audio, Belton revealed that after Peters was fired his application to become a private client had been deleted.
Days later, he was informed by Belton that bank employees were intimidated by him. In another secret recording, Belton divulged, “They’re not going to say this, but I don’t have the same level of intimidation that they have — you know what I’m saying? — not only being a former athlete but also being two black men.” He then said of Venniro, “You sit in front of him, you’re like three times his size — you feel what I’m saying? — he already probably has his perception of how these interactions could go.”
Belton added, “We’ve seen people that are not of your stature get irate, and it’s like, ‘Well, if this dude gets upset, like what’s going to happen to me?’”
Kennedy then asked if Venniro was racist. He didn’t receive a straight answer. Instead, Belton said, “I don’t think any person at that level is dumb enough for it to be that blatant. I don’t have any reason to believe blatantly that he’s that way. You feel what I’m saying? Now, whether there’s some covert action? To be honest? I always err on the side of thinking that. You know, people that are not us probably have some form of prejudice toward us.”
Kennedy has since removed most of his money from the bank and filed a complaint with an industry watchdog.
As for JPMorgan Chase, they issued a letter addressing Kennedy’s complaint. “You stated that Mr. Belton informed you that our firm was prejudiced against you and intimidated by you because of your race. We found no evidence to substantiate your allegations,” the letter said.
Seems like diversity and inclusion among some institutions is more of a catchphrase than a practice.