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Chase Sued for Denying Porn King Loan on ‘Moral’ Grounds

Chase Sued for Denying Porn King Loan on ‘Moral’ Grounds

LOS ANGELES—The fact that JPMorgan Chase & Co. denied a loan request by longtime customer Marc L. Greenberg was bad enough; it’s their reason for doing so that got them sued. According to the complaint filed in Los Angeles Superior Court against the nation’s strongest bank, Greenberg—who founded Los Angeles-based soft-porn studio MRG Entertainment in 1997 with partner Rich Goldberg, selling it in 2006 to New Frontier—says it was he who was approached by a JPMorgan Securities vice president about refinancing one of his properties in Marina Del Rey.

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As a Chase securities customer and home loan customer, and considering the fact that he has an annual income of more than $500,000 and a net worth of more than $10 million, Greenberg naturally assumed that the process would go smoothly and relatively quickly. But four months later, after being subjected to what he felt was a very odd runaround, Greenberg picked up the phone and called JPMorgan Securities Vice President Adam Gelcich.

The complaint alleges what happened next: "Adam Gelcich was evasive in his response to plaintiff's application status requests and finally informed plaintiff during a telephone conversation that plaintiff's loan application was refused due to 'moral reasons,' because of JPMorgan's disapproval of plaintiff's former source of income and occupation as an owner of a television production company that produced television programs that dealt with the subject of human sexuality. Plaintiff's repeated attempts to obtain a written statement of the reasons for the denial of his loan application and a copy of JPMorgan's 'morals clause' were ignored. Communication with Adam Gelcich abruptly ceased.”

But that was just the beginning of Greenberg’s dealings with Chase prior to litigation. According to Courthouse News Service, “Greenberg claims he sent Gelcich an email crying foul over what he perceived to be JPMorgan Chase's discriminatory lending practice. He threatened legal action and served the bank with an intent to sue notice—which caught the attention of Deb Vincent, a VP in Chase's legal fair lending department.”

Vincent said she would try to get to the bottom of the problem, but in December of last year Greenberg received an email from her “stating that they are 'unable to provide any resolution to [plaintiff's] allegations, as [JPMorgan] is unable to locate any refinance application from [plaintiff].

“For the next several weeks,” reported CNS, “Greenberg's lawyers pressed Vincent to find the loan application… Eventually, Greenberg claims Vincent told him Gelcich no longer worked for Chase and she was ‘unable to locate someone who may have worked with or managed Adam Gelcich.'"

Only Gelcich was still employed by Chase, according to the complaint, which states that after Greenberg’s attorneys were able to locate him, Gelcich told them where they could stick their grievance.

"Adam Gelcich,” claims Greenberg, “contemptuously informed plaintiff's counsel that 'JPMorgan can deny an application for reputational risk to our firm' and mockingly added that plaintiff was 'making a big deal over nothing' and 'good luck' in obtaining legal relief.”

That response, according to CNS, was repeated by a JPMorgan Chase executive director and assistant general counsel, who “denied the accusations of unfair lending, saying the bank complied with federal and California regulations in processing Greenberg's application.”

Which brings us to the lawsuit. In addition to claiming that “plaintiff was denied equal access to basic economic opportunities based on his former ownership of a television production company that dealt with the subject of human sexuality,” Greenberg then essentially unloads on JPMorgan Chase for its hypocrisy.

“JPMorgan's discrimination against plaintiff on 'moral' grounds is particularly repugnant and hypocritical,” it reads, “coming from a corporation under federal investigation for illegal, immoral and unethical conduct, including: A. Multibillion dollar trading losses that cost its shareholders between $5 billion and $15 billion; B. A criminal investigation of top JPMorgan executives by the FBI over lying to investors and federal regulators with respect to the multibillion dollar trading losses; C. Misstatements by JPMorgan regarding how the bank harmed more than 5,000 homeowners in foreclosure; D. Inadequate controls against money laundering that allow tainted money to move through the bank's network; E. Violations of federal law in failing to report suspicious transactions of Bernie Madoff; F. Selling CDOs [collateralized debt obligations] to customers by concealing that the CDOs were comprised of failing home loans; G. Rigging bids to cities and counties; H. Overcharging and manipulating electrical power markets resulting in JPMorgan being barred from the electrical power market; I. Engaging in transactions involving Cuba, Iran and Sudan in violation of the U.S. embargoes.”

The complaint continues, "Despite JPMorgan's lack of morality when considering its own conduct, JPMorgan purports to be so ashamed of nudity and human sexuality that it cannot process a refinance of a home loan of plaintiff, secured by plaintiff's house, because plaintiff's source of income six years ago included production of television programs that contained nudity and human sexuality. JPMorgan has overlooked its own moral transgressions as it continues to mislead shareholders, mislead customers, manipulate markets and trade with enemies of the United States, but it is relentless in seeking to punish plaintiff for his former involvement in television programming involving human sexuality that JPMorgan purportedly finds to be shameful.

“In rejecting plaintiff's application,” the complaint adds, “JPMorgan asserted that its superior moral position prevented it from loaning plaintiff money because one of plaintiff's sources of income did not meet JPMorgan's 'morality standards' and that the 'reputational risk' of loaning plaintiff money threatened JPMorgan's public image. JPMorgan's hypocrisy would be laughable except plaintiff was in fact illegally discriminated against and denied a loan by JPMorgan."

There’s more, much of which can be read in the CNS story. We’re looking for the original complaint and will post it as soon as we can find it.






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Tom Hymes

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