Ex-First Republic Advisor Seeks Order Forcing JPMorgan to Cover Growing Legal Tab

A former top producer at J.P. Morgan Advisors asked a New York state court last week to order his former employer to pay his mounting legal costs as he faces regulatory investigations and $263 million in arbitration claims. The request is the latest turn in a dispute that began in October, when Arif Ahmed asked a Delaware state court to rule that JPMorgan Chase & Co. must advance and pay any attorneys’ fees, costs and expenses that he incurred in defending against litigation stemming from his work at the bank. In January, the Delaware court ruled that Ahmed, a 26-year industry veteran, was entitled to partial “advancement” of the funds but would need to seek in arbitration the unreimbursed portion, which totals more than $1 million, according to his most recent lawsuit. Ahmed, who is now with venture capital firm General Catalyst, subsequently filed his claims in arbitration with the Financial Industry Regulatory Authority, but he alleged in the New York suit that the case won’t be heard until 2027. The arbitrators had declined to expedite his case, and Ahmed argued that his legal bills have become so steep that he could be forced to abandon his defense strategy. Ahmed “filed this case to force JP Morgan to honor its contractual duties to pay defense costs on his behalf,” his lawyer, Patrick J. Smith, a partner at Clark Smith Villazor in New York, wrote in an email. The lawyer added that a Delaware court “has already found that JP Morgan reneged on one such commitment” and that Ahmed is refusing “to accept JP Morgan’s unprincipled and unlawful breach of its payment obligations.” Ahmed’s New York state court petition claims the bank’s obligations stem from agreements Ahmed made with his former employer First Republic, which JPMorgan bought out of government receivership in May 2023. A JPMorgan spokesperson declined to comment. JPMorgan sought unsuccessfully to overturn the Delaware court’s January ruling, and missed by three days a June deadline to file an application for an appeal, according to the court documents. Ahmed is defending against “two regulatory investigations and two customer arbitrations…arising out of his former employment” with JPMorgan and that the bank is “obligated to defend Mr. Ahmed and fund his defense costs,” according to his petition. Ahmed’s BrokerCheck record shows two pending customer complaints that separately are seeking $225 million and $38 million in damages. Arash Ferdowsi, an Iranian-American billionaire who had been chief technology officer at Dropbox, had brought the $225 million claim in 2024 over allegations that Ahmed placed him into unsuitable complex products that underperformed and generated $40 million in excessive fees. Arbitration hearings in that case began in June, according to the lawsuit. “The harm to Mr. Ahmed increases with every passing day,” he argued in his petition. “This is exactly the type of irreparable injury that bargained-for advancement provisions aim to prevent.” Ahmed started in the industry in 1998 at Merrill Lynch and was responsible for a 10-person team and $16 million in annual revenue by 2019, when he joined First Republic Bank’s private wealth unit. The dispute echoes another costly fight over former employees’ legal expenses. JPMorgan was previously hit in July with $115 million in lawyers’ bills for Charlie Javice per agreements tied to its purchase of her financial-aid startup and was ordered last month to continue paying them. Javice was sentenced to seven years in prison after being convicted of defrauding the bank in connection with the $175 million sale of her company.