NYC Broker Greengrass Owes J.P. Morgan $450K After ‘Unjust Enrichment’ Claim Backfires
A dispute over a big money client that allegedly went all the way to the top of the house at J.P. Morgan resulted last week in a panel of arbitrators shooting down a broker’s “unjust enrichment” claim against his former employer and instead ordering him to repay hundreds of thousands of dollars he owed on a promissory note.
Greengrass, a 40-year New York City broker and scion of the founder of the famous Jewish deli of the same name on Manhattan’s Upper West Side, left J.P. Morgan at the beginning of 2018 after an internal dispute over an account generating millions of dollars in commission, he said in an interview. He currently works at Aegis Capital Corp, according to registration records.
“I’m grossly disappointed,” Greengrass, who fought a promissory note battle once before when leaving Morgan Stanley for J.P. Morgan in 2010, said in an interview. “They should not have had the promissory note awarded because they harmed my ability to repay it.”
His initial unjust enrichment claim, filed with Finra in September 2019 but not elaborated upon in the award document, centered on Greengrass’ allegation that another J.P. Morgan employee in its institutional business in March of 2016 stole his largest client, a hedge fund customer, and denied him an opportunity to co-cover the account despite the client’s wishes, according to Greengrass and his lawyer, Ethan A. Brecher with an eponymous firm in New York.
Shortly after the account was reassigned, Greengrass secured a meeting with J.P. Morgan Chief Executive Jamie Dimon, who then brokered a “deal” for Greengrass to receive a 20% commission for a year, Brecher said. But the deal was granted under false pretenses as both Greengrass and Dimon were misled by a manager at the firm to believe that a customer had initiated the switch, the lawyer said.
A spokeswoman for J.P. Morgan, which counterclaimed in December 2019 for the note balance, declined to comment on the arbitration and a follow-up inquiry on Greengrass and Brecher’s claims. A company official declined on Dimon’s behalf to comment or confirm the meeting.
Brecher said they plan to ask a court to vacate the decision on procedural grounds that JPMorgan Chase, rather than J.P. Morgan Securities, was the holder of the note, and to re-raise the issue that the firm unfairly harmed the broker by poaching his most lucrative client.
It was the same argument that one of the panelists, an industry arbitrator, raised in dissenting specifically on the promissory note repayment portion of the award. The arbitrator, who agreed with denying Greengrass’ claim for damages, said he did not believe J.P. Morgan had the “standing to assert the claim on the promissory note.”
The panel also held Greengrass liable for most of the arbitration fees, according to the award, which assessed $11,200.00 of the hearing session fees to the broker and the remaining $5,600 to J.P. Morgan.
In 2013, Greengrass, whose career has spanned seven firms, and Brecher were successful in fending off a $1.1 million lawsuit from Morgan Stanley, seeking repayment of notes after Greengrass’ move in 2010 to J.P. Morgan Securities.
The wirehouse had claimed Greengrass owed roughly $940,550 plus interest because he left the firm before fulfilling the terms of his 2005 signing bonus. Greengrass countered, saying the firm didn’t make good on a promise that his large institutional accounts would be provided with the same preferential margin interest rates and margin collateral levels they enjoyed while at Smith Barney, his former employer.
Greengrass confirmed the hedge fund account at issue in the J.P. Morgan case was his largest but did not provide any figures for his assets overseen or annual revenue.
“Over my career I’ve developed very large accounts–dealt with the biggest of the biggest,” he said. “I was able to develop him, keep him, and keep the relationship going for [J.P. Morgan] to steal at a time their business was in decline. My business was doubling and tripling at that point; they were grabbing for revenue.”