The
Securities and Exchange Commission (SEC) announced today that JP Morgan
Securities LLC (JPMS) has settled charges related to obstructing advisory
clients and brokerage customers from reporting potential securities law
violations. JPMS has agreed to pay an $18 million civil penalty as part of the
settlement.
According
to the SEC’s order, JPMS engaged in the practice of requesting retail clients
to sign confidential release agreements between March 2020 and July 2023. These
agreements were presented to clients who had received credits or settlements
from the firm exceeding $1,000. The terms of the agreements compelled clients
to maintain confidentiality regarding the settlement, underlying facts, and
information related to the account in question. Importantly, while the
agreements allowed clients to respond to SEC inquiries, they expressly
prohibited clients from voluntarily contacting the SEC.
The
SEC’s Director of Enforcement, Gurbir S. Grewal, emphasized the illegality of
including provisions that prevent individuals from reporting wrongdoing to the
SEC. Grewal stated: “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.”
JP Morgan Settles for $18M Over Whistleblower Violations, SEC Announces🏦🔍
💰 Settlement Amount: JP Morgan agrees to pay $18 million to resolve whistleblower protection violations.
🏛️ Regulatory Action: U.S. Securities and Exchange Commission (SEC) confirms the settlement.
🚫…— LongYield (@LongYield) January 16, 2024
Corey
Schuster, Co-Chief of the Enforcement Division’s Asset Management Unit,
highlighted the importance of ensuring that confidentiality agreements do not
impede potential whistleblowers. Schuster noted, “Investors, whether
retail or otherwise, must be free to report complaints to the SEC
without any interference.”
The
SEC’s order determined that JPMS violated Rule under the Securities Exchange
Act of 1934, a whistleblower protection rule that prohibits actions hindering
individuals from communicating directly with SEC staff about potential
securities law violations. Without admitting or denying the findings, JPMS
agreed to be censured, cease and desist from violating the whistleblower
protection rule, and pay the $18 million civil penalty.
The
Securities and Exchange Commission (SEC) announced today that JP Morgan
Securities LLC (JPMS) has settled charges related to obstructing advisory
clients and brokerage customers from reporting potential securities law
violations. JPMS has agreed to pay an $18 million civil penalty as part of the
settlement.
According
to the SEC’s order, JPMS engaged in the practice of requesting retail clients
to sign confidential release agreements between March 2020 and July 2023. These
agreements were presented to clients who had received credits or settlements
from the firm exceeding $1,000. The terms of the agreements compelled clients
to maintain confidentiality regarding the settlement, underlying facts, and
information related to the account in question. Importantly, while the
agreements allowed clients to respond to SEC inquiries, they expressly
prohibited clients from voluntarily contacting the SEC.
The
SEC’s Director of Enforcement, Gurbir S. Grewal, emphasized the illegality of
including provisions that prevent individuals from reporting wrongdoing to the
SEC. Grewal stated: “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.”
JP Morgan Settles for $18M Over Whistleblower Violations, SEC Announces🏦🔍
💰 Settlement Amount: JP Morgan agrees to pay $18 million to resolve whistleblower protection violations.
🏛️ Regulatory Action: U.S. Securities and Exchange Commission (SEC) confirms the settlement.
🚫…— LongYield (@LongYield) January 16, 2024
Corey
Schuster, Co-Chief of the Enforcement Division’s Asset Management Unit,
highlighted the importance of ensuring that confidentiality agreements do not
impede potential whistleblowers. Schuster noted, “Investors, whether
retail or otherwise, must be free to report complaints to the SEC
without any interference.”
The
SEC’s order determined that JPMS violated Rule under the Securities Exchange
Act of 1934, a whistleblower protection rule that prohibits actions hindering
individuals from communicating directly with SEC staff about potential
securities law violations. Without admitting or denying the findings, JPMS
agreed to be censured, cease and desist from violating the whistleblower
protection rule, and pay the $18 million civil penalty.
