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JP Morgan to pay $18 million for violating whistleblower protection law

JP Morgan to pay $18 million for violating whistleblower protection law

The Securities and Exchange Commission (SEC) has charged JP Morgan $18 million for obstructing clients and brokerage customers from reporting breaches of law to regulatory authorities. The payments giant has agreed to pay the penalty charge.

The SEC reported that between March 2020 and July 2023, JP Morgan included provisions in their contracts that prevented clients from contacting the SEC with evidence of violating laws, forcing them to choose between receiving settlements, credit, and services and reporting wrongdoing to the SEC.

Corey Schuster, co-chief of the enforcement division’s asset management unit commented: “Investors, whether retail or otherwise, must be free to report complaints to the SEC without any interference. Those drafting or using confidentiality agreements need to ensure that they do not include provisions that impede potential whistleblowers.”

The company was charged with defying the whistleblower protection rule under the Securities and Exchange Act of 1934, that keeps institutions from stopping individuals in alerting violations to securities laws to SEC staff.

JP Morgan agreed to the cease and desist.

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