United States SEC Fines JP Morgan $18 Million for Whistleblowing Violation by Preventing Hundreds of Clients from Reporting Potential Security Violations from 2020 to 2023, Clients Signed Confidential Agreement If Issued Over $1,000 Credit or Settlement, Client Not Allowed to Voluntarily Contact United States SEC Even with Incoming United States SEC Inquiry
17th January 2024 | Hong Kong
The United States Securities & Exchange Commission (SEC) has fined JP Morgan $18 million for whistleblowing violation by preventing hundreds of clients from reporting potential security violations from 2020 to 2023, with clients signing confidential agreement if issued with over $1,000 credit or settlement. Clients are also not allowed to voluntarily contact United States SEC even with incoming United States SEC inquiry. United States SEC: “According to the SEC’s order, from March 2020 through July 2023, JPMS regularly asked retail clients to sign confidential release agreements if they had been issued a credit or settlement from the firm of more than $1,000. The agreements required the clients to keep confidential the settlement, all underlying facts relating to the settlement, and all information relating to the account at issue. In addition, even though the agreements permitted clients to respond to SEC inquiries, they did not permit clients to voluntarily contact the SEC.” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement: “Whether it’s in your employment contracts, settlement agreements or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of wrongdoing. But that’s exactly what we allege J.P. Morgan did here. For several years, it forced certain clients into the untenable position of choosing between receiving settlements or credits from the firm and reporting potential securities law violations to the SEC. This either-or proposition not only undermined critical investor protections and placed investors at risk, but was also illegal.” Corey Schuster, Co-Chief of the Enforcement Division’s Asset Management Unit: “Investors, whether retail or otherwise, must be free to report complaints to the SEC without any interference. Those drafting or using confidentiality agreements need to ensure that they do not include provisions that impede potential whistleblowers.” More info below:
“ United States SEC Fines JP Morgan $18 Million for Whistleblowing Violation by Preventing Hundreds of Clients from Reporting Potential Security Violations from 2020 to 2023, Clients Signed Confidential Agreement If Issued Over $1,000 Credit or Settlement, Client Not Allowed to Voluntarily Contact United States SEC Even with Incoming United States SEC Inquiry “
United States SEC Fines JP Morgan $18 Million for Whistleblowing Violation by Preventing Hundreds of Clients from Reporting Potential Security Violations from 2020 to 2023
16th January 2024 – The Securities and Exchange Commission today announced settled charges against J.P. Morgan Securities LLC (JPMS) for impeding hundreds of advisory clients and brokerage customers from reporting potential securities law violations to the SEC. JPMS agreed to pay an $18 million civil penalty to settle the charges.
The SEC’s order finds that JPMS violated Rule 21F-17(a) under the Securities Exchange Act of 1934, a whistleblower protection rule that prohibits taking any action to impede an individual from communicating directly with the SEC staff about possible securities law violations. Without admitting or denying the SEC’s findings, JPMS agreed to be censured, to cease and desist from violating the whistleblower protection rule, and to pay the $18 million civil penalty.
The SEC’s investigation was conducted by Marie DeBonis and Jessica Neiterman, with assistance from John Farinacci, and supervised by Virginia Rosado Desilets, Brianna Ripa, Mr. Schuster, and Andrew Dean, all of the SEC’s Asset Management Unit. Rua Kelly of the Trial Unit also assisted in the investigation.
The SEC strongly encourages the public to submit any tips, complaints, and referrals via https://www.sec.gov/tcr.
Sign Up / Register
Caproasia Users
- Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
Caproasia Platforms | 11,000 Investors & Advisors
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
Monthly Roundtable & Networking
Family Office Programs
The 2024 Investment Day
- March 2024 - Hong Kong
- March 2024 - Singapore
- June 2024 - Hong Kong
- June 2024 - Singapore
- Sept 2024 - Hong Kong
- Sept 2024 - Singapore
- Visit: The Investment Day | Register: Click here
Caproasia Summits
- The Investment Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
