Two whistleblowers who exposed JPMorgan Chase & Co.’s practice of leading wealthy clients into investments that were the most profitable for the bank will share a record $61 million award from the Securities and Exchange Commission (SEC).
The whistleblower awards will come from the SEC’s share of a $307 million settlement JPMorgan agreed to pay in December 2015 after admitting that it failed to disclose conflicts of interest to some of its wealth management clients. The bank stopped short of admitting guilt, saying that its omissions were the unintended result of weaknesses in its communications.
The SEC gets $267 million of the total settlement while the remaining $40 million goes to the Commodity Futures Trading Commission (CFTC), which, like the SEC, has operated its own Dodd-Frank sanctioned whistleblower program since 2010.
According to Bloomberg, the SEC notified six whistleblower applicants involved in the JPMorgan case of its preliminary decision regarding the award amounts. One of the whistleblowers is set to receive 18 percent of the SEC’s portion of the settlement amount, $48 million, and the other will collect 5 percent, or $13 million.
The SEC determined that the information provided by the other four whistleblowers did not lead to a successful enforcement action. Those informants have 60 days to appeal the SEC’s determination.
The CFTC has not yet determined whistleblower payouts in the JPMorgan case, but those awards, like the SEC’s, can range from 10 percent to 30 percent of the total sanctions, depending on the value of the information they provided.
According to Bloomberg, the whistleblower who will receive the higher award has also applied for a CFTC whistleblower award. However, the SEC wrote to the CFTC that it is opposed to a whistleblower receiving a double award. The SEC said it would avoid making its final award determination until after the CFTC makes its own decision on the matter or the whistleblower withdraws the award application.
Prior to its determination to award a JPMorgan whistleblower $48 million, the highest whistleblower award the SEC paid was $30 million. The SEC doesn’t disclose details about its whistleblower cases and related actions.
Are you aware of fraud being committed against the federal government, or a state government? If so, you may be protected and rewarded for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.