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Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
$61Mn Payday for JPMorgan Whistleblowers - Will Double-Dipping Be Allowed?
by Howard Haykin
The SEC is preparing to issue a $61 million award to 2 whistle-blowers who provided information that led to a $307 million settlement with JPMorgan. The bank agreed in December 2015 to pay $267Mn to the SEC and $40Mn to the CFTC to settle charges that it improperly steered clients to its in-house mutual funds and hedge funds. The $61 million award - $48Mn to one, $13Mn to the other – would dwarf the previous SEC award for $30 million that was paid out in 2014.
The SEC said that the whistleblower set to receive the higher SEC award has also applied to the CFTC, which operates its own whistleblower program. Given the SEC’s opposition to “double recoveries” by whistleblowers, it plans to delay its final award determination until the CFTC renders its own decision or the whistleblower withdraws his or her application with the CFTC.
JPMORGAN CASE. According to regulators, from 2008 to 2015, brokers and financial advisers in two divisions of JPMorgan gave preference to investment products created by the bank’s asset management division when deciding where to put client money. In some cases, the clients were put into products with higher fees, which earned JPMorgan more money, even when the same JPMorgan product was available for a lower fee. Several JPMorgan brokers reported that they were encouraged by their superiors to put their clients into proprietary funds even when lower-cost or better-performing funds were available.
As part of the settlement, JPMorgan was not required to stop giving preferential treatment to its own funds. However, the bank was required to enhance its disclosures that was sent to all clients.