JPMorgan has agreed to pay $18mn to settle charges by the Securities and Exchange Commission accusing the bank of impeding hundreds of customers from reporting potential violations to the regulator, in breach of whistleblower protection rules.
Between March 2020 and July 2023, the bank allegedly asked retail clients on a regular basis to sign confidential release agreements if they had received credit or settlement of more than $1,000. The terms prohibited clients from voluntarily contacting the SEC, according to the regulator.
“For several years, [JPMorgan] 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,” said Gurbir Grewal, director of the SEC’s enforcement division. “This either-or proposition not only undermined critical investor protections and placed investors at risk, but was also illegal.”
JPMorgan, which did not admit or deny the SEC’s findings, said in an emailed response to the FT: “We take our regulatory obligations seriously and promptly took action to resolve this issue.”
This post has been updated to include a response from JPMorgan