The US Securities and Exchange Commission (SEC) says JPMorgan Chase will pay an $18 million fine for actively working to stop customers from reporting illegal activity at the leading US bank.
In a press release, the SEC says JPMorgan Chase routinely asked retail customers to sign confidential release agreements if they had been issued a credit or settlement from the firm of more than $1,000.
The agreements barred JPMorgan’s customers from their right to act as a whistleblower and voluntarily reach out to the SEC to report illegal activity.
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“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.
But that’s exactly what we allege J.P. Morgan did here. For several years, it forced certain clients into the untenable position of choosing between receiving settlements or credits from the firm and reporting potential securities law violations to the SEC.
This either-or proposition not only undermined critical investor protections and placed investors at risk, but was also illegal.”
Although the banking giant has not admitted or denied the SEC’s findings, it has agreed to be censured, to cease and desist from violating the whistleblower protection rule.
JPMorgan Chase has paid a staggering $38.99 billion in fines for banking, securities and other violations since 2000, according to a comprehensive database known as the Violation Tracker.
