JPMorgan takes legal longshot fighting $4.25M ‘salami incident’ arb award

JPMorgan has become the latest wealth firm to mount a longshot challenge against an industry arbitration decision, asking a court to dismiss a $4.25 million FINRA award granted to a broker fired over a Super Bowl-timed client meeting.

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It faces the same slim chances of success, according to industry lawyers.

In a petition filed last week JPMorgan asked the U.S. District Court for the Central District of California to overturn the arbitration penalty it was hit with in May. The award came two years after JPMorgan’s termination of a broker named Brent Ryan Bodner for expenses he charged the firm for a client meeting held at his home the day of the 2024 Super Bowl — an event now widely labeled as the “salami incident.” It also comes after both Stifel and UBS separately saw similar attempts to have large arbitration awards overturned go down in defeat.

Bodner responded in November 2024 to his firing by submitting a complaint to the Financial Industry Regulatory Authority, the brokerage industry’s self-regulator. Bodner contended that he had suffered wrongful termination and tortious interference in his business. He also argued JPMorgan had defamed him in its required Form U5 regulatory filing, in which the firm explained its reasons for the firing.

In seeking the dismissal of Bodner’s $4.25 million award, JPMorgan noted that federal law allows courts to dismiss arbitration decisions handed down by arbitrators who “exceeded their powers.” JPMorgan’s petition argues the three panelists who handed down Bodner’s award had simply “substituted their business judgment for Chase’s and concluded Bodner should not have been fired.”

“That conclusion has no basis in the applicable, undisputed law, and can only be the product of arbitrators who refused to follow the law,” according to JPMorgan. A JPMorgan spokesman declined to comment on the case.

READ MORE: Arbitrators blast JPMorgan for ‘pattern’ of post-resignation firings 

The ‘high legal hurdle’ for vacating an arbitration decision

Industry experts say JPMorgan’s chances of succeeding in the Bodner case are about as strong as those of other firms that have recently tried to question large arbitration awards — in other words, not very strong at all.

Bill Singer, a securities lawyer and the retired author of the Broke and Broker blog, said firms have “an incredibly high legal hurdle” to cross when they try to have arbitration awards dismissed.

“Simply getting the law or facts wrong is legally insufficient to overturn an award,” he said.

Bodner’s lawyer, Marc Rosen of the Law Offices of Marc Seldin Rosen, likewise put JPMorgan’s chances of success at close to zero. Even if JPMorgan can demonstrate the arbitrators in the case made a legal error — which he has no reason to believe they did — arbitration decisions can’t be overturned “unless the error is purposeful,” he said.

“They’re just doing this because the case went viral, No. 1,” Rosen said. “And they are trying to create this illusion that there was some type of rogue panel of arbitrators to create the illusion in the minds of their investor population that they run a type ship, which they don’t.”

READ MORE: Unhappy with FINRA arbitration? Now’s the time to recommend fixes 

An annual Super Bowl party becomes a meeting with clients

Bodner’s case has attracted attention not only for the details of his termination but because of the prominence he enjoyed at the firm before being let go. At the time of his firing, Bodner had been a 12-year fixture in JPMorgan’s Los Angeles offices, where he managed about $1 billion in client assets.

Throughout his employment at JPMorgan, Bodner was in the habit of holding yearly Super Bowl parties for friends and relatives at his home. But in 2024 — when the Kansas City Chiefs were playing the San Francisco 49ers in the championship game — he decided to make a change and invite current and prospective clients. Rosen said the Super Bowl was shown on TV during the meeting but that the gathering was specifically business-related and not a party.

Rosen said Bodner did nothing different from advisors who take clients to Lakers or Dodgers games. The biggest advantage to holding a client meeting at home, he said, is privacy.

“Why would JPMorgan want to have financial discussions take place in a public place like a restaurant or a sporting event rather than a private place where no one can overhear them?” Rosen said.

Ultimately, the only guests to attend Bodner’s client meeting were his cousin and her boyfriend, whom Bodner considered a prospective client. But it wasn’t the lack of clients or the $642.50 that Bodner spent on sandwiches and other food that got him in trouble. It was instead the expense report filed by his assistant — his sister. The report made the meeting seem as though it had taken place at a local deli, rather than Bodner’s home.

Bodner is now registered as a broker with Wells Fargo.

Stifel’s and UBS’ recent unsuccessful attempts at contesting arbitration awards

It’s not just legal experts who say JPMorgan’s attempt to overturn an unfavorable FINRA arb decision is a longshot. Recent cases involving Stifel and UBS suggest the same.

In February, for instance, a magistrate judge in New York dealt Stifel a blow by recommending against overturning a landmark $132.5 million FINRA arbitration award handed down over a now-barred broker’s investment recommendations. A month later, UBS suffered defeat in its request to vacate a $1 million arbitration award. The firm had been hit with the penalty the previous year for firing a broker over questionable trades made on behalf of a client. UBS went to suffer an even bigger setback in June, when another federal judge rejected its attempt to overturn a $95.3 million award over an advisor’s recommendations that clients short Tesla stock.

In its court petition in the Bodner case, JPMorgan noted that Bodner had been an at-will employee, meaning JPMorgan was within its rights to firm him “for any reason, or for no reason at all.” As it was, the firm “had ample reason to terminate Bodner’s employment: by misrepresenting the nature of an expense to access corporate funds, Bodner had abused a position of trust, and he had violated clear corporate policies,” JPMorgan argued.

READ MORE: What’s next for reforms for mandatory RIA arbitration 

Bodner’s initial claims, lack of explanation of his arb award

In his initial claim for relief, Bodner sought $15 million in compensatory damages for lost business and damage to his reputation, as well as an equal amount of punitive damages. He also asked for the expungement from regulatory records of JPMorgan’s official reasons for firing him — a request the arbitration panel ultimately granted.

Singer noted that Bodner’s complaints against JPMorgan were pressed over the course of 12 arbitration hearings this spring. As is common in many arbitration decisions, the three-member panel that handed down the award did not provide their reasoning.

That lack of explanation, further reduces JPMorgan’s chances of prevailing now in court, Singer said. The arbitrators, he said, “did not explicitly map out an incorrect legal framework in writing.”

“If there is merely any plausible interpretation of the facts presented during those 12 hearing sessions that supports the panel’s conclusion, the [Federal Arbitration Act] compels the federal court to uphold it,” Singer said.