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Two JP Morgan Whistleblowers Awarded Third-Largest Single SEC Award

Posted  March 29, 2019

Earlier this week, the U.S. Securities & Exchange Commission announced that two whistleblowers were awarded a combined $50 million for reporting securities fraud at JP Morgan. The anonymous whistleblowers, one of whom was described by his attorney as a “JP Morgan executive,” triggered the agency’s investigation and enforcement against the bank for failing to disclose to clients that the bank preferred to invest their money in its own mutual funds and hedge funds. The bank’s failure to disclose such a practice deprived its clients of essential information they needed to make sound investment decisions.  On December 18, 2015, the defendants resolved the agency’s enforcement action by agreeing to pay $267 million and admitting to wrongdoing.

Jane Norberg, the chief of the SEC’s Office of the Whistleblower, issued the following statement: “Whistleblowers like those being awarded today may be the source of ‘smoking gun’ evidence and indispensable assistance that strengthens the agency’s ability to protect investors and the capital markets. These awards show how critically important whistleblowers can be to the agency’s investigation and ability to bring a case to successful and efficient resolution.”

Under the SEC program, which was established by the 2010 Dodd-Frank Act, the agency is required to keep whistleblowers’ identities confidential. They are entitled to awards of between 10% and 30% of the monetary sanctions imposed on companies as a result of the information they provide.

In the case against JP Morgan Securities LLC and JP Morgan N.A., one whistleblower received $37 million — the third-largest single amount paid to a whistleblower under the SEC’s awards program— and the other received $13 million.

This brings the agency’s total payouts to $376 million since its whistleblower program’s inception.


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