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Would you sign an agreement with your broker-dealer if you knew you couldn’t complain if something went wrong? That’s exactly what JP Morgan required customers to do for three years, until the SEC stepped in. J.P. Morgan Securities LLC (JPMS) has paid $18 million in fines to settle charges that the firm required customers to sign an agreement prohibiting them from contacting the SEC if their credit or settlement exceeded $1,000. These agreements also required customers to keep all information confidential, including information related to their accounts. Customers were required to choose between receiving a settlement and reporting securities law violations to the SEC.Would you sign an agreement with your broker-dealer if you knew you couldn’t complain if something went wrong? That’s exactly what JP Morgan required customers to do for three years, until the SEC stepped in.

J.P. Morgan Securities LLC (JPMS) has paid $18 million in fines to settle charges that the firm required customers to sign an agreement prohibiting them from contacting the SEC if their credit or settlement exceeded $1,000. These agreements also required customers to keep all information confidential, including information related to their accounts. Customers were required to choose between receiving a settlement and reporting securities law violations to the SEC. Continue reading

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The SEC recently announced the award of over $28 million to seven individuals who submitted information to the Office of the Whistleblower that led to a successful enforcement action. The first whistleblower received $13 million Four whistleblowers received a joint award of $13 million Two whistleblowers received a joint award of $2 million The first whistleblower provided the SEC with highly detailed information that saved staff time and resources and helped return millions of dollars to defrauded investors. The second, third, fourth, and fifth whistleblowers also offered highly detailed information early in the investigation. They also participated in interviews, identified key witnesses, provided documentation, and other continuing assistance. Their assistance also led to the return of millions of dollars to defrauded investors in the case. The fifth and sixth whistleblowers began aiding SEC staff after the investigation had already begun, but participated in interviews, offered documentation and continuing assistance throughout the investigation. All seven whistleblowers voluntarily provided their information to the SEC after multiple attempts to report their concerns to company management. The first five whistleblowers “suffered hardships as a result” after these attempts to report concerns to the company.The SEC recently announced the award of over $28 million to seven individuals who submitted information to the Office of the Whistleblower that led to a successful enforcement action.

  • The first whistleblower received $13 million
  • Four whistleblowers received a joint award of $13 million
  • Two whistleblowers received a joint award of $2 million

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The SEC has released figures for recovery and returns for the Fiscal Year 2023. The press release details the record high $600 million paid to SEC whistleblowers, and the recovery of nearly $5 billion through a total of 784 enforcement actions, the second highest in history. Actions resulted in nearly $1 billion in returns to defrauded investors. FY2023 Statistics The SEC’s FY2023 year end results are: SEC whistleblower awards of $600 million, including a record $279 million awarded to a single whistleblower, paid with funds from administrative and financial penaltiesThe SEC has released figures for recovery and returns for the Fiscal Year 2023. The press release details the record high $600 million paid to SEC whistleblowers, and the recovery of nearly $5 billion through a total of 784 enforcement actions, the second highest in history. Actions resulted in nearly $1 billion in returns to defrauded investors. Continue reading

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In our previous post, we reviewed the major provisions of the Anti-Money Laundering Act of 2020 (AMLA), an expansion of the Bank Secrecy Act (BSA). We also started tackling the enforcement priorities of the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the agency most responsible for anti-money laundering enforcement. Now that we have a sense of what AMLA is about and what prosecutors are focused on, we’ll look at how it expands the pool of eligible whistleblowers and the compensation they might receive. In December 2022, Congress amended the AMLA whistleblower program of 2020 with the intention of better aligning the AMLA program with successful whistleblower programs at the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). Given the breadth of its statutory reach and the unique characteristics of its whistleblowing program, AMLA goes beyond both of those programs, however—and has the potential to become the most important whistleblowing program in the U.S.In our previous post, we reviewed the major provisions of the Anti-Money Laundering Act of 2020 (AMLA), an expansion of the Bank Secrecy Act (BSA). We also started tackling the enforcement priorities of the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the agency most responsible for anti-money laundering enforcement. Now that we have a sense of what AMLA is about and what prosecutors are focused on, we’ll look at how it expands the pool of eligible whistleblowers and the compensation they might receive. Continue reading

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On January 1, 2021, overriding a veto by then-President Trump, the Senate passed into law the Anti-Money Laundering Act of 2020 (AMLA)—the largest anti-money laundering legislative effort since the 2001 Patriot Act. The AMLA fortified existing laws, such as the Bank Secrecy Act (BSA), as well as a somewhat anemic whistleblowing program, to align it more closely with the highly-successful Securities and Exchange Commission (SEC) whistleblower program. The result is that the amended AMLA’s enforcement reach is now much broader than the SEC’s program. Industry watchers predict the new whistleblowing program may have seismic repercussions throughout the financial world. In this post, we’ll review some of AMLA’s key points, while in the next two, we’ll focus on how AMLA impacts whistleblowing—who is eligible, what are the possible awards, and how whistleblowers can identify the kinds of tips that are likely to earn an AMLA award. On January 1, 2021, overriding a veto by then-President Trump, the Senate passed into law the Anti-Money Laundering Act of 2020 (AMLA)—the largest anti-money laundering legislative effort since the 2001 Patriot Act. The AMLA fortified existing laws, such as the Bank Secrecy Act (BSA), as well as a somewhat anemic whistleblowing program, to align it more closely with the highly-successful Securities and Exchange Commission (SEC) whistleblower program. Continue reading

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The rash of cryptocurrency failures, cybersecurity failings, and potential for money laundering are a focus of the U.S. Securities and Exchange Commission (SEC) examiners in the coming year. The high-profile FTX case and criminal charges against Sam Bankman-Fried and others have brought the issues to the SEC’s attention. The SEC handled 24 enforcement actions involving cryptocurrency in the first half of 2023. Going forward, the SEC will pay closer attention to cryptocurrency assets and companies, as well as anti-money laundering (ALM) programs going into 2024.The rash of cryptocurrency failures, cybersecurity failings, and potential for money laundering are a focus of the U.S. Securities and Exchange Commission (SEC) examiners in the coming year. The high-profile FTX case and criminal charges against Sam Bankman-Fried and others have brought the issues to the SEC’s attention. The SEC handled 24 enforcement actions involving cryptocurrency in the first half of 2023. Continue reading

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The Commodities Futures Trading Commission (CFTC) recently announced the award of $18 million to a single whistleblower who provided substantial assistance to the agency. This information led to a successful CFTC enforcement action as well as a related action with another federal agency. The whistleblower met with Division of Enforcement (DOE) staff on multiple occasions to discuss their concerns. Information from the individual was “significant in amount and quality,” according to the CFTC press release. In the order, the CFTC noted that the individual’s contributions “enhanced Division staff’s ability to resolve the Covered Action.”  Without this information, CFTC staff would have been unable to establish specific facts in the covered action that were “underlying.”The Commodities Futures Trading Commission (CFTC) recently announced the award of $18 million to a single whistleblower who provided substantial assistance to the agency. This information led to a successful CFTC enforcement action as well as a related action with another federal agency. The whistleblower met with Division of Enforcement (DOE) staff on multiple occasions to discuss their concerns. Information from the individual was “significant in amount and quality,” according to the CFTC press release. Continue reading

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New York-based hedge fund investment and technology development firm D. E. Shaw has settled with the SEC over charges that it violated the rights of current and former employees when it raised “impediments” for them to become whistleblowers. The SEC also fined D. E. Shaw $10M to settle the charges. D. E. Shaw has since updated its documentation to allow employees to contact the SEC and other agencies to report possible misconduct. At issue is the firm’s requirement that employees sign agreements that prohibited the disclosure of sensitive or confidential information to any third party. Without an exception for possible SEC whistleblowers, employees were prevented from contacting the SEC with any damning information they felt necessary. Exiting employees were also required to sign a release indicating that they had not filed any reports with any governmental agency, or risk losing deferred compensation and other financial incentives.New York-based hedge fund investment and technology development firm D. E. Shaw has settled with the SEC over charges that it violated the rights of current and former employees when it raised “impediments” for them to become whistleblowers. The SEC also fined D. E. Shaw $10M to settle the charges. D. E. Shaw has since updated its documentation to allow employees to contact the SEC and other agencies to report possible misconduct. Continue reading

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The Commodity Futures Trading Commission (CFTC) announced an award of more than $300,000 to a whistleblower who submitted information to the agency regarding a company’s misconduct. Information from the whistleblower was “precise,” and described exactly the activity involved, leading to the CFTC’s Enforcement Division to open an investigation. The individual provided continual assistance during the investigation, offered additional evidence along with interpretations and explanations for CFTC staff. As a result, CFTC staff were able to move forward with the investigation while conserving resources.The Commodity Futures Trading Commission (CFTC) announced an award of more than $300,000 to a whistleblower who submitted information to the agency regarding a company’s misconduct.

Information from the whistleblower was “precise,” and described exactly the activity involved, leading to the CFTC’s Enforcement Division to open an investigation. The individual provided continual assistance during the investigation, offered additional evidence along with interpretations and explanations for CFTC staff. As a result, CFTC staff were able to move forward with the investigation while conserving resources. Continue reading

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In a recent press release,In a recent press release, the Commodities Futures Trading Commission (CFTC) announced $15 million in bounties awarded to two whistleblowers for individual cases. In the first case, a whistleblower affiliated with a company notified the CFTC of activity that was harming its customers. The CFTC opened an investigation and discovered the information to be credible and original. The individual offered continual assistance, saving CFTC staff resources and time. This included assisting staff with interpreting vital evidence, including another witness to corroborate the claims. During the investigation, the whistleblower’s information contradicted and made more sense than the company’s official explanation. The CFTC increased its analysis of the activity and the harm being done to the customers under Section 23 of the Commodities Exchange Act. Overall, this whistleblower’s information was crucial to the successful investigation and enforcement action. the Commodities Futures Trading Commission (CFTC) announced $15 million in bounties awarded to two whistleblowers for individual cases.

In the first case, a whistleblower affiliated with a company notified the CFTC of activity that was harming its customers. The CFTC opened an investigation and discovered the information to be credible and original. The individual offered continual assistance, saving CFTC staff resources and time. This included assisting staff with interpreting vital evidence, including another witness to corroborate the claims. Continue reading

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