October 2, 2013 — To prevent investors from suffering catastrophic losses as a result of unethical conduct by banks and others in the financial sector, the U.S. Congress established a whistleblower program in the Dodd-Frank Act of 2010. Tipsters who notify the Securities and Exchange Commission (SEC) about securities law violations may be handsomely compensated for their courage in collaborating with the government. Informants may receive as much as thirty percent of the total amount the government recovers, so long as it exceeds $1 million.
JPMorgan Chase Admits U.S. Securities Law Violations
To resolve charges against it by the SEC and by regulators in the UK, JPMorgan Chase will pay $920 million in penalties and acknowledge its violation of U.S. securities laws. The charges came in connection with huge trading losses incurred by JPMorgan’s London traders last year.
JPMorgan’s global trading losses were initially announced in May and have since grown to more than $6 billion. The SEC alleged that JPMorgan did not have sufficient risk controls set up at the time its traders made complex derivative bets and lost. Two traders have been accused of covering up the losses.
Now, JPMorgan will settle the SEC’s charges by conceding the facts outlined by the SEC’s charges, publicly acknowledging violation of U.S. securities laws and paying a $200 million penalty. JPMorgan’s deal with the SEC comes as part of a larger global settlement with the U.K. Financial Conduct Authority, the Office of the Comptroller of the Currency and the Federal Reserve. The total amount JPMorgan will pay in penalties is around $920 million, NPR reports.
JPMorgan has pledged to work with regulators in the prosecution of the bank’s two former employees. In addition, JPMorgan claims that it has initiated many changes to avoid similar wrongdoing in the future.
Whistleblowers Notify SEC of Violations in the Securities Industry
Bank insiders with information about securities law violations would be wise to learn how the Dodd-Frank whistleblower program works prior to notifying the SEC. To remain anonymous, tipsters must retain an attorney to act on their behalf — they cannot notify the government themselves. Waters & Kraus is recognized nationally for its whistleblower practice. Our SEC fraud lawyers have the experience necessary to safeguard informants’ interests in securities fraud cases. Contact us by email or call our whistleblower attorneys at 855.784.0268 to learn how we can work together to do the right thing.
