SEC Shoots Down NLPC’s Shareholder Proposal for JPMorgan Chase

Last week the Securities and Exchange Commission rendered a decision regarding a shareholder proposal submitted by National Legal and Policy Center for the JPMorgan Chase & Co. annual meeting that is expected to be held in May.

In the proposal, NLPC had asked for the company to disclose all requests it had received from the federal government to close customers’ accounts — in other words, to reveal how and why JPMorgan was complicit with any government attempts to censor customers by “de-banking” them.

Under SEC rules, companies can challenge whether proposals are appropriate to bring to a vote by shareholders at the meetings. The companies may exclude the resolutions as voting matters from their proxy statements (which are issued several weeks ahead of the meetings) for a variety of reasons. Among the reasons why companies can exclude proposals are if they address “ordinary business operations” or if they are found to “micromanage” the company’s affairs. Exceptions are allowed if the purpose of the proposal addresses a societal issue that is so significant that it “transcends ordinary business matters.”

When a proponent and the company disagree on points such as these, the SEC serves as the referee to resolve whether the proposal should be allowed or not. In the case of NLPC’s proposal, the SEC decided that de-banking customers without explanation is not a significant enough issue that “transcends” the importance of JPMorgan’s day-to-day business. The SEC docket on the matter, which includes arguments over the matter between the big bank’s lawyers and Paul Chesser, director of NLPC’s Corporate Integrity Project, has been posted at the agency’s website.

Our allies at the National Center for Public Policy Research had also submitted a proposal to JPMorgan on the de-banking issue, with its emphasis being on risks to the bank related to “non-pecuniary factors” when it comes to discontinuing relationships with clients and thus closing their accounts. Here also the SEC decided against the proponent and in favor of JPMorgan.

Curiously, the SEC did permit a third proposal for JPMorgan that addresses the debanking issue, this one submitted by The Bahnsen Family Trust, which emphasizes “discrimination in the provision of services based on race, color, religion, sex, national origin, or social, political, or religious views,” and whether the bank’s de-banking practices implicate any of these factors and whether they “impact individuals’ exercise of their constitutionally protected civil rights.”

At least JPMorgan will have to answer for its de-banking practices in some form. Last month NLPC and NCPPR called attention to the fact that the mega-bank allowed convicted pedophile Jeffrey Epstein to keep his accounts open while he withdrew hundreds of thousands of dollars to pay the child-victims of his sex trafficking enterprise. Meanwhile, JPMorgan shut down the account of the National Committee for Religious Freedom, unexplained, only three weeks after founder Sam Brownback, the former U.S. Ambassador for Religious Freedom, opened it.

The hypocrisy was the subject of a news story by Fred Lucas at the Heritage Foundation’s Daily Signal website.

On Wednesday FoxBusiness.com reported that JPMorgan Chairman/CEO Jamie Dimon (pictured above) will be deposed in a lawsuit about the company’s relationship with Epstein.

In Chesser’s argument to the SEC that JPMorgan’s discriminatory de-banking practices “transcended ordinary business,” he cited the Brownback example as well as the company’s cooperation with the federal government in “Operation Choke Point” during the Obama administration, which sought to shut down several politically disfavored — but legal — businesses, such as firearms dealers, payday lenders, and precious metals dealers.

He also noted the personal political bias of Dimon, who reportedly “lit into former President Donald Trump” at a party of former JPMorgan executives following the 2022 election, where guests were “surprised by the ferocity of his performance.”

Dimon is among those who federal regulators are looking to to help with the bailout of troubled banks such as First Republic.