Glitz and Gladwell: A scandal for JPMorgan’s wealth clients | Job Binary


The row at JPMorgan Chase over how to manage the fortune of retired baseball star Alex Rodriguez has sparked a two-year battle within the bank that has involved such prominent figures as pop sensation Jennifer Lopez and author Malcolm Gladwell, as well as chief executive Jamie Dimon.

The tug-of-war has sparked open tensions within JPMorgan, pitting the lender’s private bank against the wealth advisory business acquired as part of its acquisition of Bear Stearns during the 2008 financial crisis.

At the center of the scandal is Gwen Campbell, a well-known financial advisor. He joined JPMorgan in 2020 from Bank of America Merrill Lynch to set up shop at JPMorgan Advisors, bringing with him clients including Rodriguez, as the old Bear operation is now known.

Campbell accused colleagues at private bank JPMorgan of trying to take Rodriguez away. In one case, a private bank tried to use an existing relationship with Lopez as part of a strategy, people familiar with the matter said.

Gladwell, New York Times bestselling author of books including Pivot point and a longtime client of Campbell’s rushed to his defense, sending a letter to Dimon on his behalf, according to reports seen by the Financial Times. Dimon did not respond directly, instead instructing other executives to answer customers’ questions.

“I thought he was the statesman, Jamie Dimon. It’s like an 11-year-old kid’s game,” Gladwell told the FT.

“Besides what he did to Gwen, I’m a client. My life savings are at JPMorgan. My financial advisor was exiled like Napoleon on Elba. Is this how you treat your clients? I’m a little doll, but a lot of her clients aren’t little dolls,” she added.

Since December, Campbell has been seeking financial damages through arbitration for alleged breach of contract. The hearing is scheduled for July next year.

Until then, Campbell is still working for JPMorgan in San Francisco. His team of advisers lost three members and he complained of periodic blackouts on the bank’s computer systems.

“What JPMorgan is doing is not only hurting Gwen, but it’s directly hurting her clients, who are JPMorgan clients. That’s something Jamie Dimon and the board are aware of,” said Campbell’s attorney, Wigdor LLP partner Michael Willemin.

A JPMorgan spokeswoman said the bank had “considered and invested significantly” in JPMorgan Advisors and had “established rules for situations where clients are served by multiple lines of business.”

“These rules allow us to deliver the experience our clients need while ensuring they and our financial professionals are treated fairly,” the spokesperson said.

The internal wrangling comes as JPMorgan has separate but disparate businesses – JPMorgan Advisors, where Campbell works, and the private bank, which serves wealthy clients but is under different management.

Inside JPMorgan, financial advisers and private bankers regularly lament internal competition for clients, according to current and former employees.

In another case earlier this year involving another adviser, the private bank and JPMorgan advisers argued over which division should manage the money of a client who had inherited several hundred million dollars from a relative, according to a person familiar with the matter.

Dimon ended the engagement by telling both sides the bank didn’t have the market share for turf wars, the person said. The client decides for himself which department to deposit the money.

The dispute between Campbell and the private bank came to light in December when it filed the first of several actions against JPMorgan seeking an injunction against the bank. This request was rejected.

Campbell also sought financial damages, sought arbitration and filed a gender discrimination complaint with the US Equal Employment Opportunity Commission in April.

Some of Campbell’s clients liked Gladwell and wrote to Dimon, urging him to intervene on their behalf.

In June, Gladwell sent an email to Dimon asking him to “find a way to end this dispute in a peaceful and graceful way.” Gladwell questioned JPMorgan Wealth Management CEO Christine Lemkau, who was involved in Campbell’s hiring.

Lemkau told Gladwell that he could not comment on Campbell’s allegations pending the completion of the arbitration, but that JPMorgan was “willing to investigate and resolve any issues he raised.”

Gladwell, who has known Campbell for more than 20 years, said he was surprised by how JPMorgan treated him.

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

Jackie Reses, a former executive at payments company Square who is now CEO of Lead Bank, another unhappy Campbell client, told the FT that JPMorgan was “wrong in this case”.

“JPMorgan should treat this as a client matter, not as a lawsuit,” said Reses, whose net worth was estimated by Forbes last year at more than $1 billion.

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

Before joining JPMorgan, Campbell advised its investment bankers, Rodriguez and Lopez, on a failed attempt to buy the New York Mets baseball team in 2020. Rodriguez also kept a “low seven-figure sum” in a private bank, Campbell said in legal documents. As a result, when he joined, Rodriguez was assigned as a joint client between JPMorgan Advisors and the private bank.

Campbell said his relationship with Rodriguez was to be protected by an agreement with JPMorgan, which said the way it worked with mutual clients would be to “maintain the current nature of their relationship with a private bank.” But he accused the private bank of soliciting business from several of its clients, with Rodriguez as its primary target.

The private bank won much of Rodriguez’s business by providing loans to buy a minority stake in the Minnesota Timberwolves basketball team in 2021, Campbell said in court filings. This was after Campbell was told by JPMorgan Advisors that it would not finance the loan.

Ahead of that loan, the private bank transferred Lopez from its West Coast team to New York bankers tasked with building a relationship with Rodriguez, people familiar with the decision said. At the time, Rodriguez and Lopez were engaged and the reassignment was made in hopes that it would facilitate future business with Rodriguez, the people said.

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

In a letter to JPMorgan’s board in April, seen by the FT, Campbell said it was not his prerogative to pursue legal action and he “wants to honor the terms of my employment contract”.

“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 book of business I brought to JPMorgan.”

Additional reporting by Sarah Germano



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