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.
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.
The Federal Deposit Insurance Corp. is arguing that Colorado has the right to establish an interest rate cap that all state-chartered banks must follow. Three industry groups are suing the state in an effort to stop its attempted crackdown.
The Philadelphia-based bank's parent company, Republic First Bancshares, had been roiled by a yearslong proxy battle involving activist investors groups and its former CEO.
The Wyoming-based digital asset bank filed paperwork to challenge last month's district court ruling, which affirmed the Federal Reserve's view about its discretion over master account applications.
The former head of the Consumer Financial Protection Bureau resigned Friday after the troubled rollout of the Free Application for Federal Student Aid led some House Republicans to call for his resignation.
The San Antonio-based bank said that loan growth, fueled in part by its expansion in key Texas markets, may compensate for pressure on deposits. It slashed the number of rate cuts it expects this year from five to two.
Mississippi's Renasant names its next CEO; environmental fintech Aspiration Partners spins out its consumer brand; the OCC adds five weeks to comment period for Capital One-Discover merger; and more in the weekly banking news roundup.