JPMorgan will pay US$18 million to settle accusations of violating SEC rules in the US

The Securities and Exchange Commission (SEC), the United States Securities and Exchange Commission, announced this Tuesday, 16, the dismissal of charges against JP Morgan Securities for preventing hundreds of consulting and brokerage clients from reporting possible practices that represent violation of legislation governing transactions in the American capital market. The agreement calls for JPMorgan to pay a civil penalty of $18 million to put an end to the allegations.

According to the SEC, from March 2020 to July 2023, JPMorgan regularly asked retail clients to sign confidentiality agreements if they had received a credit or financial settlement of more than $1,000 from the company. The agreements required customers to keep confidential the financial settlement, all related underlying facts, and all information relating to the account in question. Furthermore, although the agreements permitted customers to respond to the SEC's inquiries, they did not permit customers to voluntarily contact the SEC.

“Whether in your employment contracts, financial settlement agreements or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of wrongdoing,” said Gurbir Grewal, director of the SEC's Division of Enforcement. in a note on the website. “For several years, the bank 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 proposal affected critical investor protections and put investors at risk, and was illegal.”

“Investors, whether individuals or not, should be free to report complaints to the SEC without any interference,” said Corey Schuster, one of the heads of the Division of Enforcement's Asset Management Unit. “Those who draft or use confidentiality agreements need to ensure that they do not include provisions that impede potential whistleblowers.”