J.P. Morgan Securities has been ordered by a Finra arbitration panel to pay $250,000 to a broker who claimed the company defamed him in a regulatory filing after he moved to another firm in 2022.
The three-member arbitration panel also recommended that the defamatory language on Michael C. Nolan’s Form U5 be expunged.
Nolan, who worked at J.P. Morgan for 31 years, resigned in September 2022 and joined RBC Capital Markets. The announcement by RBC at the time said that he and his son, Brian Nolan, operated the Nolan Group and managed $1 billion in client assets.
Following his departure from J.P. Morgan, the bank in its Form U5 filing, according to BrokerCheck, stated that Nolan was being reviewed internally for allegedly “sharing material non-public information with a client; failing to properly disclose his personal affiliation with an outside business interest prior to requesting information from firm resources regarding the outside interest; and violating the firm's policy prohibiting the use of unapproved electronic communication channels for business communications.”
Nolan claimed in his Finra complaint that the allegations were “untrue, anticompetitive and defamatory.” He said that he provided the bank with “evidence of the falsity of the allegations long before it made these statements, and [J.P. Morgan] chose to make them solely to damage my reputation.”
J.P. Morgan spokeswoman Trish Wexler said the company declined to comment.
In his statement of claim, initially filed in February 2023 with Finra, Nolan alleged defamation; tortious interference with prospective contractual relations; and violation of Finra 1122, which prohibits inaccurate or misleading information in Finra filings.
Nolan sought $5.2 million in compensatory damages; $1 million for emotional distress; and $555,000 in legal fees, including fees/costs incurred during the bank’s internal investigation. He also had requested “up to 10 times the amount of compensatory damages and punitive damages.”
Additionally, Nolan requested that his Form U5 be cleared of the defamatory language and that his employment termination showed as “voluntary,” and that there was “no violation of internal policies.”
After 12 hearing sessions, the arbitrators on Wednesday awarded Nolan $250,0000 in compensatory damages and wiped his record of any defamatory language.
The panel denied Nolan’s request for punitive damages and fees. Both parties were each assessed $11,137.50 in hearing fees.
Nolan began his career in 1983 with Goldman, Sachs & Co., and worked for Morgan Stanley & Co., and Bear, Stearns & Co., before joining J.P. Morgan.
His attorney, Todd Gutfleisch, of New York–based Harris St. Laurent & Wechsler LLP, said they are pleased that the panel expunged the U5 filed by the bank, “which showed they obviously cited with us in finding its falsity and defamatory nature. And Mr. Nolan, after 41 years in the business, deserves that,”