From March 2020 to July 2023, JPMorgan used legal language that made customers promise "not to sue or solicit others to institute any action or proceeding against" the firm when a customer accepted a settlement or credit from the bank worth more than $1,000, according to the SEC order.
Michael Nagle/Bloomberg News
JPMorgan Chase broke a federal whistleblower protection rule through agreements with customers that barred them from proactively reaching out to the Securities and Exchange Commission when they accepted a settlement or a credit from the bank, the regulator alleged Tuesday.
Processing Content
The bank agreed to pay an $18 million fine to settle the probe without admitting or denying the SEC's findings.
From March 2020 to July 2023, JPMorgan used legal language that made customers promise "not to sue or solicit others to institute any action or proceeding against" the firm when a customer accepted a settlement or credit from the bank worth more than $1,000, according to the SEC order. At least 362 JPMorgan customers signed such agreements, and the bank has since revised the language, the regulator said.
"We take our regulatory obligations seriously and promptly took action to resolve this issue," a bank spokesperson said in a statement.
Under the agency's rules, companies are explicitly and broadly prohibited from obstructing anyone from providing tips to the SEC. Hedge fund D.E. Shaw & Co. paid a $10 million fine last year over alleged breaches of whistleblower protections.
"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," SEC enforcement chief Gurbir Grewal said in a statement Tuesday.
Alert volume keeps climbing. Headcount doesn't. Watch this on-demand session to see how risk and compliance teams are using AI agents to clear backlogs, cut cost per investigation, and scale without adding headcount.
World Liberty Financial, a digital asset venture co-founded by members of the Trump family, received conditional approval for a national trust bank charter.
BayFirst Financial in St. Petersburg plans to focus on larger commercial deals after repairing the damage from a failed strategy that emphasized small-dollar loans backed by the U.S. Small Business Administration.
August is National Make a Will Month, but advisors say it's important to urge clients year-round to secure their wishes by keeping wills and estate plans fresh.
The agency quietly returned the digital asset company's national trust bank charter filing without issuing a decision. Zerohash plans to refile this month.
