J.P. Morgan Will Pay $18 Million to Resolve Securities Industry Whistleblower Violations
On January 16th, 2024, the Securities and Exchange Commission (SEC) announced that J.P. Morgan—the large New York-based investment bank—has reached a settlement with the agency to pay $18 million to resolve violations of whistleblower regulations. Here, our Florida SEC whistleblower lawyer discusses the case and the law in more detail.
SEC Order: J.P. Morgan Usually Unlawfully Restrictive Settlement Agreements
The SEC initiated a civil legal complaint against J.P. Morgan for violation of federal whistleblower laws. Regulators emphasize that the large investment bank obstructed its clients (investors) from reporting potential violations of securities laws to the SEC between March of 2020 and July of 2023.
According to the complaint from the SEC, J.P. Morgan required retail clients (retail investors) who were receiving settlements in excess of $1,000 to sign confidentiality agreements. These agreements prohibited any reporting to the SEC. That type of clause is unlawful.
Indeed, it violates the securities industry whistleblower regulations included in the Dodd-Frank Act as well as Rule 21F-17(a) of the Securities Exchange Act of 1934. To resolve the matter, J.P. Morgan will pay an $18 million civil financial penalty. Beyond that, the investment bank has agreed to revise its practices to stop any future violations of federal whistleblower law. Notably, as part of the enforcement action, the SEC emphasized that all people in the industry, including investors, have the right to report suspected securities law violations.
Any Person Can Report a Securities Violation Through the SEC Whistleblower Program
The SEC Whistleblower Program allows any individual to report securities law violations. The ability to bring a complaint as an SEC whistleblower is not limited to employees of a company or other securities industry insider. Quite the contrary, any person with credible information can participate. Investors can bring a claim. Further, outside securities professionals can bring a claim. The program ensures confidentiality and protects the identity of whistleblowers.
A Whistleblower Award Can Be Used if Information Leads to Successful Enforcement Action
Whistleblowers who provide information that leads to a successful enforcement action by the SEC may be eligible for a financial award if the total value of that enforcement action exceeds $1 million. The award can range between 10 percent and 30 percent of the money collected in the enforcement action. It is a core financial incentive that is a key feature of the SEC Whistleblower Program. The whistleblower’s role in the enforcement action and the significance of the information provided are crucial factors in determining the award amount. Notably, it is a confidential program. The SEC does not publish the names of the people who are granted whistleblower compensation.
Get Help From Our SEC Whistleblower Attorney Today
At Carlson & Associates, P.A., we are committed to providing the highest level of personalized representation to our clients. With deep knowledge of SEC whistleblower laws, our firm gets results. If you have any questions about SEC whistleblower claims, we are here to help. From our office in Miami, we advocate for securities industries whistleblowers throughout Florida.
Source:
sec.gov/news/press-release/2024-7
