SEC Whistleblower Lawyer Blog
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.
The SEC found that JPMS violated Rule 21F-17(a) under the Securities Exchange Act of 1934. This rule restricts actions that prevent someone from contacting and communicating with SEC staff to discuss potential violations of US securities law. JPMS did not admit or deny the SEC’s findings, and agreed to a censure, an $18 million civil penalty, and to stop violating the whistleblower protection rules.
From March 2020 through July 2023, JPMS required clients to sign these restrictive agreements to prevent voluntary contact with the SEC. Clients were restricted from discussing details about their account, and the very existence of the agreement. They were allowed to speak with the SEC if they were contacted by SEC staff regarding an inquiry. In some cases, JPMS offered clients an additional payment or credit if they had signed the agreement.
Some of the language in the agreement included:
“the [JPMS client] promises not to sue or solicit others to institute any action or proceeding against [JPMS] arising out of events concerning the Account” and that if the JPMS client breaches that provision, JPMS “may undertake whatever legal action they deem appropriate to address the breach(s), including, but not limited to, injunctive relief, and monetary damages not to exceed the settlement amount.”
The SEC found this to be illegal and filed the charges.
Whether it is in a FINRA arbitration settlement agreement, employment contract or lawsuit settlement, wall street cannot buy a person’s silence. However, any insider, investor, or other person who reports misconduct to the SEC whistleblower office can file anonymously through counsel and protect their identity.
Retaining Experienced SEC Whistleblower Attorneys
SEC whistleblowers help everyone by notifying the SEC of conduct that harms the investing public, while also earning financial compensation for themselves. Hiring experienced SEC counsel may greatly increase the probability that the SEC will initiate an investigation based on your information. If you wish to remain anonymous, you must be represented by an attorney, who will submit everything on your behalf.
Silver Law Group and the Law Firm of David R. Chase jointly have experienced SEC whistleblower lawyers, including a former SEC Enforcement attorney on the team, so you will always have guidance throughout the process. Our SEC whistleblower attorneys can help you if you have information regarding securities or investment fraud, violations of federal securities laws, false filings, market manipulation, or other misconduct. You must provide timely, credible, and original information or analysis to be eligible.
Contact us through our online form or at (800) 975-4345 for a consultation. Our attorneys work on a contingency fee basis. This means that it costs you nothing to hire us, and we collect our fees only if you receive an SEC bounty. Because we get paid when you do, we have the incentive to help you collect the maximum award available.