JPMorgan Chase offered a settlement earlier this year to a former employee in an unsuccessful effort to head off his discrimination and harassment lawsuit, which has become the talk of Wall Street, according to spokespeople for the bank and the former employee’s lawyer.
JPMorgan offered the former employee $1 million to settle his complaints, but the two sides could not come to terms, two people briefed on the settlement negotiations said.
The lawsuit, which was filed in New York State Supreme Court last week, asserted in lurid detail that JPMorgan had permitted a female investment banker to make a string of sexual advances and racially motivated comments to a lower-ranking bank employee of South Asian descent.
The former employee sued under a pseudonym, John Doe. The two people who were briefed, and who requested anonymity because they were not permitted to speak publicly about the matter, identified the plaintiff as Chirayu Rana, a former vice president on a JPMorgan team that arranges loans and other financing for low-rated companies.
Among his accusations were that Lorna Hajdini, an executive director on his team, threatened his job if he did not submit to sex and taunted him with nicknames. The lawsuit called the threats “tantamount to hate crimes” and said JPMorgan executives had sought to sabotage the plaintiff’s efforts to get another job after he left the bank in October.
The allegations have ricocheted around and beyond Wall Street since the lawsuit was filed. TMZ, the celebrity gossip site, put out three reports on the allegations, while The New York Post has published nine.
In a statement, lawyers for Ms. Hajdini called the accusations false and “entirely fabricated.” Brian Marchiony, a JPMorgan spokesman, said the bank had investigated the claims and found them meritless. The bank said the former employee had declined to participate in its investigation.
“We did try to reach an agreement to avoid the time and expense of litigation and to support an employee who was being threatened with the very reputational harm now unfolding,” Mr. Marchiony said in a statement. “We continue to believe these allegations have no merit, and new information raised as a result of the public filing only reinforces that conclusion.”
The plaintiff’s lawyer, Daniel Kaiser, said, “In my 30-plus year career as an employment litigator I have never had an employer defendant make such a substantial offer if they truly believed the allegations to ‘have no merit.’”
The Wall Street Journal earlier reported the size of JPMorgan’s settlement offer.
Alain Delaquérière contributed research.
Rob Copeland is a finance reporter for The Times, writing about Wall Street and the banking industry.
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