Glitz and Gladwell: The infighting over JPMorgan’s valuable fortune clients

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Infighting at JPMorgan Chase over how to manage the fortunes of retired baseball star Alex Rodriguez has turned into a two-year battle at the bank, involving high-profile figures such as pop sensation Jennifer Lopez and author Malcolm Gladwell, and managing director Jamie Dimon.

The standoff has laid bare tensions within JPMorgan, pitting the lender’s famed private bank against a wealth advisory business acquired as part of the 2008 purchase of Bear Stearns during the financial crisis.

At the center of the feud is a prominent financial adviser named Gwen Campbell. She brought in clients including Rodriguez when she joined JPMorgan from the Merrill Lynch division of Bank of America in 2020 and moved to JPMorgan Advisors, as the former Operation Bear is now known.

Campbell accused colleagues at JPMorgan’s private bank of trying to lure Rodriguez. In one instance, the private bank tried to leverage an existing relationship with Lopez as part of its strategy, according to people familiar with the matter.

Gladwell, a New York Times bestselling author of books whose The tipping point and a longtime Campbell client, rushed to his defense, sending a letter to Dimon on his behalf, according to messages seen by the Financial Times. Dimon did not respond directly, instead commissioning other executives to address customer concerns.

“I thought he was supposed to be a statesman, Jamie Dimon. It’s like a game an 11-year-old would play,” Gladwell told the FT.

“Regardless of what he does to Gwen, I’m a customer. My savings are with JPMorgan. My financial adviser went into exile like Napoleon on the island of Elba. Is this how you treat your customers? I’m small fry, but a lot of his customers aren’t,” he added.

Since December, Campbell has been seeking damages through arbitration for what she alleges was a breach of contract. A hearing is scheduled for next July.

In the meantime, Campbell is still working at JPMorgan in San Francisco. Her team of advisers lost three members and she complained in court filings that she was periodically locked out of the bank’s computer systems.

“What JPMorgan is doing is not just hurting Gwen, but having a direct negative impact on her customers who are JPMorgan’s customers. This is something that is known to Jamie Dimon and the board,” said Campbell’s attorney Michael Willemin, a partner at Wigdor LLP.

A JPMorgan spokeswoman said the bank had “given significant attention and investment” to JPMorgan Advisors and “put rules in place for situations where clients are served by more than one line of business.”

“These rules allow us to provide clients with the expertise they need while ensuring that they and our finance professionals are treated fairly,” the spokeswoman said.

The infighting stems from the fact that JPMorgan has separate but overlapping businesses – both JPMorgan Advisors, where Campbell works, and private banking cater to high net worth clients but are under different management.

Within JPMorgan, financial advisers and private bankers routinely bemoan internal competition for clients, according to current and former employees.

In another case involving a different adviser earlier this year, the private bank and JPMorgan Advisors argued over which division should handle the money of a client who had inherited hundreds of millions of dollars from a relative, according to a person familiar with the matter.

Dimon eventually stepped in, telling both sides that the bank didn’t have the market share for turf wars, the person said. It was up to the client to decide which division he would put his money in.

The dispute between Campbell and the private bank came to light in December when it filed the first of several lawsuits against JPMorgan, asking a court for a restraining order against the bank. This request was rejected.

Campbell also filed for arbitration seeking damages and in April filed a lawsuit with the U.S. Equal Employment Opportunity Commission, alleging she had been discriminated against based on sex.

Some of Campbell’s clients have, like Gladwell, written to Dimon and urged him to intervene on his behalf, according to emails seen by the FT.

Gladwell emailed Dimon in June asking him to “find a way to end this dispute quietly and graciously.” Gladwell received a response from Kristin Lemkau, managing director of JPMorgan Wealth Management, who was involved in hiring Campbell.

Lemkau told Gladwell she could not comment on Campbell’s allegations due to ongoing arbitration, but that JPMorgan was “committed to exploring and resolving any issues she raises.”

Gladwell, who has known Campbell for more than 20 years, said he was shocked by the way JPMorgan treated her.

“It strikes me that they are torturing her,” Gladwell told the FT. “I don’t understand why anyone would willfully make someone’s life miserable for no reason.”

Jackie Reses, a former executive at payments company Square who is now managing director of Lead Bank, is another disgruntled Campbell client, telling the FT that JPMorgan “is not doing well in this situation”.

“JPMorgan should view this as a customer issue, not a litigation issue,” said Reses, whose net worth was pegged at more than $1 billion by Forbes last year.

Campbell came to JPMorgan Advisors in 2020 with nearly $1.4 billion in assets and client loans, according to a legal filing in December. This included millions of dollars belonging to Rodriguez, who earned around $400 million during his 22-year baseball career. After retiring from the New York Yankees in 2016, the slugger known as A-Rod became a broadcaster, investor and entrepreneur.

Before Campbell joined JPMorgan, his investment bankers had already advised Rodriguez and Lopez on an unsuccessful bid to buy the New York Mets baseball team in 2020. Rodriguez also kept a “low seven-figure amount.” at the private bank, Campbell claimed in legal documents. . As a result, upon her arrival, Rodriguez was designated as a split client between JPMorgan Advisors and the private bank.

Campbell argued that her relationship with Rodriguez should have been protected by an agreement with JPMorgan that the approach to dealing with shared clients would be to “maintain the current nature of their relationship with the private bank.” But she accused the private bank of launching several of her clients for business, with Rodriguez the main target.

The private bank ended up winning more business from Rodriguez by providing a loan for his acquisition of a minority stake in the Minnesota Timberwolves basketball team in 2021, Campbell alleged in court documents. This was after Campbell was told JPMorgan Advisors would not fund the loan.

Prior to that loan, the private bank had also transferred cover for Lopez from its West Coast team to New York bankers who had been tasked with cultivating a relationship with Rodriguez, according to people familiar with the decision. At the time, Rodriguez and Lopez were engaged and the reassignment was done in hopes it would make future business with Rodriguez easier, the people said.

JPMorgan declined to comment. Reps for Lopez and Rodriguez did not respond to requests for comment.

In a letter sent to JPMorgan’s board in April, seen by the FT, Campbell said pursuing litigation was not her preference and that she wanted ‘the terms of my employment contract to be honoured’. .

“If that’s not possible,” Campbell wrote, “the third option is to part ways and resolve this issue in a way that reflects the value of the billion dollar business volume I have. brought to JPMorgan”.

Additional reporting by Sara Germano

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