U.S. Department of Labor Occupational Safety and Health Administration 201 Varick Street, Room 670

New York, New York 10014

Tel: (212) 337-2368 

Fax: (212) 337-2371

March 3, 2016 

Ms. Sarah E. Bouchard, Esq. 

Morgan Lewis & Bacchius LLP 

1701 Market Street 

Philadelphia, PA 19103-2921 

Via UPS, Tracking No.

Re: JPMorgan Chase Bank, N.A. 

Dear Ms. Bouchard, 

This is to advise you that we have completed our investigation of the above referenced 

complaint filed by (Complainant) against JPMorgan Chase Bank, NA. 

(Respondent) on May 29, 2015, under the employee protection provisions of Section 806 of 

the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the SarbanesOxley Act (SOX), 18 U.S.C. §1514A and the Consumer Financial Protection Act of 2010 

(CFPA), §1057 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 

12 U.S.C. §5567. In brief, Complainant alleges Respondent retaliated against by removing 

Complainant’s responsibilities, eliminating position, not permitting Complainant to remain in 

the office while enrolled in the Talent Reassignment Program, and subsequently terminating 

employment for Complainant’s “refusal to pass failed RCSA tests”1

and for raising regulatory 

reporting issues to senior management and audit and compliance personnel that had a direct 

impact on the accuracy of Respondent’s regulatory reporting. 

Following an investigation by a duly-authorized investigator, the Secretary of Labor, acting

through agent, the Regional Administrator for the Occupational Safety and Health 

Administration (OSHA), Region II, finds that there is reasonable cause to believe that 

Respondent violated SOX and CFPA and issues the following findings:

 

 Secretary’s Findings

Complainant was placed in the Talent Reassignment Program on or about May 1, 2014, and on 

July 31, 2014, when Complainant was not able to obtain a job position through Respondent’s 

Talent Reassignment Program, was officially terminated. On May 29, 2014 Complainant filed a 

complaint with the Secretary of Labor alleging that Respondent retaliated against in violation

 

1 RCSA, Risk Control Self-Assessment is a formal process in which Chase identifies, assesses, and monitors 

operational risk. 

(b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C (b) (7)(C (b) (7)( (b) (7)(C) (b) (7)(C)
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of SOX and CFPA. This complaint was filed within 180 days of the alleged adverse actions and is 

timely. 

Respondent is a company within the meaning of 18 U.S.C. §1514A in that it is a company with a 

class of securities registered under Section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 

781) and is required to file reports under Section 15(d) of the Securities Exchange Act of 1934 (15 

U.S.C. §78o(d)). Respondent is also a company within the meaning of 12 U.S.C. §5567. 

Respondent is a company subject to the jurisdiction of the Bureau of Consumer Financial 

Protection and is engaged in offering or providing a consumer financial product or service. 

Complainant worked for Respondent as a Loan Delivery Operations Manager in Iselin, New 

Jersey. Complainant was an employee that performed tasks related to the offering or provision of a 

consumer financial product or service. Complainant is an employee within the meaning of 18 

U.S.C. §1514A and 12 U.S.C. §5567. Complainant and Respondent are covered under SOX and 

CFPA. 

On Oct 27, 2015, OSHA notified Respondent that OSHA had reasonable cause to believe that 

Respondent has violated SOX and CFPA and that preliminary reinstatement of Complainant is 

warranted. OSHA attached evidence supporting its preliminary determination to the letter.

Respondent was allowed ten days to provide clear and convincing evidence that Complainant’s 

protected activity in no way contributed to its decision to terminate Complainant, pursuant to SOX

and CFPA. To date, Respondent has not provided any new evidence. 

Customer Service Department 

Respondent hired Complainant in September 2011 as a Customer Care Supervisor. In June 2013, 

Complainant moved to the role of Loan Delivery Operations Manager2

-Chase Mortgage Banking

supporting the Secondary Marketing within the Capital Markets. In this role, Complainant was 

responsible for the accurate and timely submissions of loans to government sponsored entities

(“GSEs”) such as FannieMae, FreddieMac, and GinnieMae. Complainant’s position was 

accountable for establishing the necessary structure and controls to enable the business to achieve 

its strategic priorities. Complainant developed process improvements and created meaningful

reporting and tracking around the salability and delivery of loans. Complainant reported to Sharon 

Detoro, Senior Vice President of Loan Delivery. The loan delivery process is the method by which 

Respondent pooled and delivered closed loans identified for mortgage backed securities (“MBS”) 

trades. 

 

 

2

 The following information was obtained from Job Connect: 

 “Loan delivery Operations Manager Responsibilities included, Manage and develops staff of approximately 3- 5FTE’s”. 

 “Insure accurately and timely delivery of all salable loans to GSE’s”. “Fully understand all GSE requirements for delivery” 

 “Lead special projects from creation to implementation” “Monitor and report on projects” “Participate in the development of goals and 

 execution of strategies within the department” 

 “Work with product development team as new products or enhancements are introduced to insure business needs are met”. 

 “Communicate and report to upper management any impacts to Loan Delivery/Capital Markets” 

 “Manage internal RCSA (Risk and Control Self-Assessment) including identifying, assessing, defining controls “Effectiveness and testing”. 

 “Support needs of Secondary Marketing, Trade Support and other Capital Market areas”. 

 

 

(b) (7)(C)
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Complainant’s primary responsibility was to ensure the data for each loan was correct and met the 

requirements of the GSE’s before delivery. The department would complete the administrative 

function of delivering the loans after the Investment Bank teams had already marketed the pools. 

When loans were identified as having errors preventing sale, it was Complainant’s job to 

investigate them on a loan by loan basis, identifying problems in the loan origination process. 

Complainant Reports SOX and CFPA violations

Protected activity under SOX consists in part of providing information to and/or causing 

information to be provided, regarding any conduct which the employee reasonably believes 

constitutes a violation of section 1341, 1343, 1344, or 1348, any rule or regulation of the 

Securities and Exchange Commission, or any provision of Federal law relating to fraud against 

shareholders, when the information or assistance is provided to a person with supervisory 

authority over the employee or such other person working for the employer who has the 

authority to investigate, discover, or terminate the misconduct.

Protected activity under CFPA consists of reporting to a person with supervisory authority over 

the employee or such other person working for the employer who has the authority to 

investigate, discover, or terminate the misconduct, reasonably believed violations of any 

provision of CFPA or any other provision of law that is subject to the jurisdiction of the 

Consumer Financial Protection Bureau (CFPB), or any rule, order, standard, or prohibition 

prescribed by the CFPB. CFPA refers to the laws implemented and enforced by the CFPB as 

Federal consumer financial law. The Home Mortgage Disclosure Act of 1975, Regulation C, (12 

U.S.C. 2801 et seq.) is one of the enumerated consumer laws. 

Complainant engaged in SOX and CFPA protected activity from November – December 2013

when reported that loans had been incorrectly recorded as sold when in fact they had not been 

sold for a period of three years, a violation of SEC rules and regulations. Complainant reported this 

to Sharon Detoro as process deficiencies, lack of proper monitoring, and reconciliation of defective 

loan exceptions. Complainant engaged in SOX protected activity when, in or about December 

2013, reported process deficiencies and a lack of proper monitoring and reconcilement of 

defective loan exceptions to Sharon Detoro, (Senior VP Loan Deliver) Darlene Kovacs, (Loan 

Delivery Operations Manager) and Val Porter (VP for Loan Delivery). Complainant had a 

reasonable belief that Respondent and its officers’ actions resulted in inaccurate disclosures, 

resulting in possible fraud to its investors, violated SEC rules and regulations, violated CFPB rules

and regulations, as well as other federal and state statutes.

 

Complainant’s protected activity continued when reported to Monica Rocha in Control 

Governance (VP Control & Government Loans) several times between December 2 and 10, 2013 

that direct managers had asked to pass the RCSA Compliance test that had previously 

failed on December 2, 2013. Complainant alleges this action was an attempt to conceal the 

deficient reconcilement process for the holding pool and the accounting violation where loans were 

inaccurately recorded as sold in the Capital Markets system of record. When Respondent was 

forced to accept the test fail, Complainant was then instructed to record the sold loan issue as an IT 

problem. A full 6 months later in April 2014 Complainant discovered that the “sold” loans had not 

been corrected at all. Complainant was also excluded from the process to review the Action Plan 

progress. The Action Plan was signed off on and closed out on May 1, three days before 

(b) (7)(C) (b) (7)( (b) (7)(C (b) (7)( (b) (7)(C (b) (7)(C) (b) (7)(C
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position was eliminated. Complainant was objectively reasonable in belief that supervisors’ 

practices were illegal and violated SEC regulations.

Complainant engaged in CFPA protected activity when contacted Emily Orr (Auditor) on or 

about January 10, 2014 and explained that coding errors had been found in the Investigator 

Records table and that was required to file the inaccurate reporting in the Home Mortgage 

Disclosure Act Loan Application Register (HMDA LAR). On or about January 16, 2014, 

Complainant continued to report to Sharon Detoro, Senior VP Loan Delivery, Val Porter, VP for 

Loan Delivery, Vishal Parihk, VP of the IT Department, Darlene Kovacs, Loan Delivery 

Operations Manager and Bill Covell, SVP of the IT Department, that the number of Purchaser 

Codes had identified as incorrect were still in the Investor Record Table within the 

Collaborative Master Data Management (CMDM). On or about January 23, 2014, Complainant 

submitted emails to Sharon Detoro, Val Porter, Vishal Parihk, Darlene Kovacs, and Bill Covell

explaining numerous violations that expected would affect the accuracy of Respondent’s 

HMDA LAR. Complainant had a reasonable belief that reporting historical HMDA Regulation C 

inaccurate disclosures and any future disclosures would be in violation of the HMDA. The 

HMDA of 1975 requires lending institutions to report public loan data. It serves to provide the 

citizens and public officials of the United States with sufficient information to enable them to 

determine whether depository institutions are fulfilling their obligations to serve the housing 

needs of the communities and neighborhoods in which they are located and to assist public 

officials in their determination of the distribution of public sector investments in a manner 

designed to improve the private investment environment, 12 CFR Part 203 (Regulation C).

On or about Jan 27, 2014 Complainant was in contact with Mr. Joseph Grams (Auditor) through 

instant message. During this instant message conversation Complainant reported that Respondent

has been selling Texas 50 (a) loans to Federal Home Loan Mortgage Corporation (FHLMC), over 

a long period, without a contractual agreement. Mr. Grams acknowledged the seriousness of the 

problem by writing in response, "Possibly damaged credibility and rep risk on the street as well if 

doesn’t package to the specs of the trade." The selling of the Texas 50 (a) loans to FHLMC without 

a contractual agreement had first been brought to the Loan Delivery Team by a senior trader within 

Capital Markets. 

Complainant, on or about Feb 25, 2014, reported via email to Sharon Detoro, Val Porter, Monica 

Rocha and Darlene Kovacs that failed the compliance test and listed the numerous violations. 

These compliance violations would result in inaccurate reporting under Regulation C. Complainant 

reported purchaser code errors existed in thousands of loans that would impact the accuracy of 

Respondent’s 2013 HMDA LAR report and its external regulatory reporting obligations. The 

details of the compliance violations were taken directly from the RCSA Compliance Test 

worksheet. 

After Complainant’s escalations, on or about Feb 26, 2014, Val Porter informed Complainant that 

she was removing the Investor Record process from team and assigning the responsibilities to 

Contract Finance. On or about April 3, 2014, Complainant submitted to Human Resources 

response to the (corporate wide) survey. Complainant’s response noted that was being told by 

management to pass a “failed” compliance test. In addition Complainant reported in the survey that 

management circumvented the Compliance Governance Action Plan and failed to addressthe

(b) (7)(C) (b) (7)(C (b) (7)(C (b) (7)( (b) (7)( (b) (7)( (b) (7)( (b) (7)(C (b) (7)(C (b) (7)(C (b) (7)(
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loans that were incorrectly represented as sold since 2011. noted violations had not been 

corrected despite the associated action plan being open for 6 months. This action plan was closed 

three days before Complainant’s position elimination despite the sold loan issue not being fixed 

and an additional 79 loans having been identified as having an erroneous "sold" status totaling over 

$12 million in value. The action plan was closed by Val Porter although Complainant was the 

named owner and did not consent to its closing. Complainant alleges the action plan was closed in 

an attempt to conceal the accounting violation and Respondent’s failure to address to the matter. 

On May 1, 2014, Complainant was invited to a “Business Update” meeting with Val Porter and 

Sharon Detoro, and was informed that role was terminated immediately. Complainant was 

immediately stripped of responsibilities and told that should no longer come to the office. 

Complainant’s employment was not immediately terminated; rather was enrolled in

Respondent’s Talent Reassignment Program. Evidence suggests Respondent normally permits 

employees to remain in the office while searching for an available position. It appears Complainant 

was treated disparately when was not permitted to remain in the office and access electronic 

systems that would have enhanced ability to find a position within the firm. 

On July 31, when Complainant was unable to obtain a job position through Respondent’s Talent

Reassignment Program, employment was officially terminated. Respondent contends 

Complainant’s position was eliminated as part of a corporate wide reduction in force affecting over 

800 employees. Respondent has failed to provide any evidence thatshows when these positions 

were eliminated, the locations of those offices, and what departments were affected. Evidence 

suggests Complainant was treated differently than other employees who had previously been 

subject to position elimination. Additionally, Complainant did not receive a bonus despite 

satisfactory performance rating. OSHA requested evidence of Respondent’s progressive 

disciplinary policy and any disciplinary action and/or counseling to substantiate why the bonus was 

withheld. However, to date Respondent has failed to provide a response. Respondent’s actions also 

demonstrate animus. Respondent asserts that the elimination of Sharon Detoro’s position further 

supports their defense. However, it was well known throughout the organization that Ms. Detoro

had planned to retire during this time period. This information was relayed to Complainant by 

active employees. 

Complainant raised both SOX and CFPA protected concerns over the course of several months. 

Numerous persons with supervisory authority over Complainant and/or persons who had the 

authority to investigate, discover, or terminate the misconduct, were made aware of these protected 

activities by Complainant; including managers, auditing officials, and compliance officials. As 

protected complaints intensified, Respondent retaliated by removing Complainant’s

responsibilities, eliminating position, not permitting Complainant to remain in the office while 

enrolled in the Talent Reassignment Program, and subsequently terminating employment. 

Evidence shows that these protected activities were a contributing factor in Respondent’s decision 

to take these adverse actions, and absent clear and convincing evidence that Respondent would 

have taken the same adverse actions even if Complainant had not engaged in protected activity, the 

complaint is meritorious. 

 

Based on OSHA’s investigation, it is reasonable to believe that Complainant’s protected activity 

was a contributing factor in the adverse action taken against . Respondent has not provided 

(b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C)
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clear and convincing evidence that it would have taken the same adverse action in the absence of 

Complainant’s protected activity. OSHA finds reasonable cause to believe that Respondent has 

violated 18 U.S.C. §1514A and issues the following preliminary order. 

 

 ORDER

Upon receipt of this Secretary’s Findings and Preliminary Order, Respondent shall immediately 

reinstate Complainant with the same rights, seniority, and benefits that Complainant would have 

enjoyed had never been discharged or experienced retaliation. Such reinstatement is not stayed 

by an objection in this order.

Respondent shall pay Complainant back pay, minus interim earnings, at the rate of 

, for the period August 1, 2014, until Respondent makes Complainant a bona fide offer of 

reinstatement. Respondent shall pay interest on the back wages in accordance with 26 U.S.C. 6621. 

As of March 6, 2016, Respondent shall pay Complainant back wages plus interest in the amount of

$151,669.36. 

Respondent shall pay Complainant compensatory damages in the amount of $51,654.85 for the 

following:

• Out of pocket medical expenses in the amount of $1,654.85

• Emotional distress and mental anguish in the amount of $50,000

•

Respondent will file with the Social Security Administration all forms necessary to ensure that the 

back pay award is allocated to the appropriate calendar periods in which Complainant would have 

earned the compensation. Refer to IRS Publication 957: Reporting Back Pay and Special Wage

Payments to the Social Security Administration, as discussed in www.irs.gov/pub/irs-pdf/p957.pdf. 

 

Respondent shall expunge Complainant’s employment records of any reference to the exercise of 

 rights under SOX and CFPA. 

Respondent shall not retaliate or discriminate against Complainant in any manner for instituting or 

causing to be instituted any proceeding under or related to SOX or CFPA. 

Respondent shall post immediately in a conspicuous place in or about itsfacility, including all 

places where notices for employees are customarily posted, including Respondents internal Web 

site for employees or emails, if Respondent customarily uses one or more of these electronic

methods for communicating with employees and maintain for a period of at least 60 consecutive 

days from the date of posting, the attached notice to employees, to be signed by responsible official 

of Respondent and the date of actual posting to be shown thereon. 

(b) (7)(C) (b) (7)(C (b) (7)(C)
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Respondent and Complainant have 30 days from the receipt of these Findings to file objections and 

to request a hearing before an Administrative Law Judge (ALJ). If no objections are filed, these 

Findings will become final and not subject to court review. 

 

Objections must be filed in writing with:

 Chief Administrative Law Judge Office of Administrative Law Judges

 U.S. Department of Labor 800 K Street NW,

 Suite 400 North Washington, D.C. 20001-8002 

 Telephone: (202) 693-7300

 Fax: (202) 693-7365

 With copies to:

 

 Sarah E. Bouchard, Esq.

 Morgan, Lewis & Bockius LLP

 1701 Market Street 

 Philadelphia, PA 19103-2921 

 Teri M. Wigger

 Assistant Regional Administrator

 US DOL OSHA

 201 Varick Street, Room 670

 New York, NY 10014

In addition, please be advised that the U.S. Department of Labor does not represent Complainant or

Respondent in the hearing; rather, each party presents his or her own case. The hearing is an 

adversarial proceeding before an Administrative Law Judge (ALJ) in which the parties are allowed 

an opportunity to present their evidence for the record. The ALJ who conducts the hearing will 

issue a decision based on the evidence and arguments presented by the parties. Review of the

ALJ’s decision may be sought from the Administrative Review Board, to which the Secretary of 

Labor has delegated responsibility for issuing final agency decisions under SOX and CFPA. A 

copy of this letter has been sent to the Chief Administrative Law Judge along with a copy of your 

complaint. The rules and procedures for the handling of SOX cases can be found in Title 29, Code 

of Federal Regulations Part 1980, and Title 29, Code of Federal Regulations Part 1985 for CFPA. 

(b) (7)(C) (b) (7)(C) (b) (7)(C) (b) (7)(C)
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They may also be obtained at www.whistleblowers.gov. 

Sincerely,

Robert D. Kulick

Regional Administrator

cc: 

U.S. Securities and Exchange Commission

U.S. DOL-Chief Administrative Law Judge

Consumer Financial Protection Bureau

Regional Office of the Solicitor

DWPP

 

 

 

 

 

(b) (7)(C) (b) (7)(C)