The U.S. Securities and Exchange Commission says JPMorgan Chase will pay an $18 million fine for actively working to prevent customers from reporting illegal activity at the leading U.S. bank.
In a press release, the SEC said JPMorgan routinely asked retail clients to sign confidential disclosure agreements if they had received a credit or settlement from the company of more than $1,000.
The agreements denied JPMorgan’s clients the right to act as whistleblowers and voluntarily contact the SEC to report illegal activities.
“Whether it’s in your employment agreements, settlement agreements, or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of misconduct.
But that’s exactly what we argue JP Morgan has done here. For years, it has forced certain customers into the untenable position of choosing between receiving settlements or credits from the company and reporting potential securities law violations to the SEC.
This either-or proposition not only undermined crucial investor protections and put investors at risk, but was also illegal.”
While the banking giant has neither admitted nor denied the SEC’s findings, it has agreed to be censured and stop violating the whistleblower protection rule.
JPMorgan Chase has paid a whopping $38.99 billion in fines for banking, securities and other violations since 2000, according to a comprehensive database known as the Violation Tracker.
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