It was the ultimate insult!
JPMorgan Chase is being accused of unleashing a “smear campaign” on a former employee by comparing him to infamous fraudster Bernie Madoff after he left to join another firm, according to a new $3 million defamation lawsuit filed in Manhattan Supreme Court.
Mark Kolta worked for the financial giant as a securities broker in its Astor Place offices for three years through 2011.
At his peak the broker pulled in $100,000,000 in business investments for the bank, he claims in the lawsuit.
Kolta says he received troubling phone calls from former clients who wanted to continue using him as a personal money manager after he departed Chase to become an independent investment adviser.
A former Chase coworker allegedly warned one client named Christopher Berry that Kolta was “out of the industry,” “had licensing issues” and “was like Madoff,” according to the lawsuit.
That coworker had also allegedly compared Kolta to the disgraced financier in a December 2011 conversation with another client named Elizabeth Colvin.
When Colvin retorted that Kolta was one of the bank’s “top producers,” the coworker allegedly shot back that “Madoff was a top producer, too.”
Kolta says the alleged bad-mouthing was the result of advice he’d given to one of his Chase clients about an outside investment, for which he was sacked in November 2011.
Kolta “developed close business relationships with his client base, apparently to JPMC’s chagrin,” he sniffs.
The alleged besmirching made former clients “reticent to move their account” from Chase to Kolta and he lost “hundreds of thousands of dollars in revenue” as a result.
Three previous customers had registered complaints against Kolta while he worked at Chase, according to a state regulatory authority.
In an April 2010 incident a customer accused Kolta of “misrepresentation regarding mutual funds investment” that resulted in a $14,000 loss, the report by the state’s securities regulator says.
JPMorgan Chase declined to comment.
Madoff, 74, will spend the rest of his life in prison after being sentenced to 150 years behind bars in 2009 after pleading guilty to the largest fraud in Wall Street history.
The massive $65 billion Ponzi scheme went on for 20 years and defrauded thousands of investors.