Securities and Exchange Commission

Two SEC whistleblowers have been awarded a total of $50 million for exposing conflict-of-interest problems with investment advisors at JPMorgan Chase Bank

The Securities and Exchange Commission announced the awards but did not offer any details of the case. However, lawyers for one whistleblower revealed it involved a 2015 $267 million settlement with the bank.

JPMorgan Chase Bank advisors invested clients’ money in JPMorgan hedge funds and mutual funds without properly disclosing the conflicts of interest, According to the 2015 settlement, some of the funds produced less revenue than other investments.

In an announcement of the award, Jane Norberg, head of SEC’s whistleblower program, wrote that insiders can “be the source of ‘smoking gun’ evidence and indispensable assistance that strengthens the agency’s ability to protect investors and the capital markets.”

One whistleblower won $13 million and the other received $37  million. The SEC announcement noted that the latter award was the third-highest award to date after the $50 million March 2018 award and a September 2018  $39 million award.


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From Feb.1:  “International Conference on Anticorruption Policies” took place in Attica, Greece on Feb. 1. Sponsored by the Hellenic Anti-Corruption Organization. Speakers at the meeting included Vladimir Hrle from the European Criminal Bar Association, Ciro Stazzeri from Global Infrastructure Anti-Corruption Center-Italy, Mia Rupcic of the Antibribery Academy International and George Patoulis, MD, the President of Central Union of Municipalities of Greece and NWC director and Washington-based lawyer Stephen M. Kohn.

Several US whistleblower laws have international applications that have been used to fight fraud and corruption worldwide.

The laws are key to anti-bribery efforts, and insider disclosures have already resulted in millions of dollars in fines in the U.S. and beyond, Washington-based lawyer Stephen M. Kohn told a group of international anti-corruption organizations on Friday, February 1.

The “International Conference on Anticorruption Policies” took place in Attica, Greece and was sponsored by the Hellenic Anti-Corruption Organization. Kohn, who is director of the National Whistleblowers Center, was one of the speakers.

Security and Exchange Commission (SEC), and IRS anti-fraud laws, the False Claims Act (FCA) and the Foreign Corrupt Practices Act (FCPA) can all be applied internationally.

But whistleblowers need to be rewarded and protected from retribution, Kohn said.  He has urged the European Parliament to strengthen its proposed whistleblower directive to protect the identity of anonymous whistleblowers.

U.S. whistleblower programs allow for the protection of witnesses and detection of corrupt activities, including bribes paid to politicians by multi-national corporations, Kohn said. Penalties act to deter fraud and bribery.

Without these programs, the costs of exposing fraud and bribery is prohibitive, Kohn said.


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U.S. Securities and Exchange Commission Photo credit Diego Radzinschi

Washington, D.C. – September 21, 2018.  The public comment period for the U.S. Securities and Exchange Commission (“SEC”) proposed amendments to the rules governing its successful whistleblower program closed on Tuesday, September 18.  More than 99% of the comments posted on the SEC’s public comment page oppose the proposed rules. 
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Full transparency needed evaluate the Commission’s proposed rules.

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Washington, D.C.  September 17, 2018.  Today the National Whistleblower Center (NWC), the nation’s leading whistleblower advocacy group, formally requested the U.S. Securities Exchange Commission (SEC) to extend the public comment period for proposed changes to the SEC Whistleblower Program
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On June 29, 2018 the U.S. Securities and Exchange Commission (SEC) announced proposed amendments that undermine the rules governing its successful whistleblower program.

National Whistleblower Center (NWC) has issued an action alert urging commentary on these proposed amendments. The SEC proposal puts caps on rewards related to cases resulting in $100 million or more in fines. This removes the incentive to blow the whistle on large corporations committing fraud, and consequently will allow large corporate fraud to go unreported and unpunished.


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sec-building-headquartersThe rewards for SEC whistleblower can be potentially limited for a successful qui tam lawsuit. The SEC is proposing controversial amendments to its whistleblower program. Under current directives, a whistleblower who provides information that leads to an SEC enforcement action receives 10%-30% of the recovery by the agency. This monetary provision incentivizes potential whistleblowers to disclose rather than remain silent.

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In Digital Realty Trust v. Somers the Supreme Court issued a destructive decision that will have far-reaching consequences for whistleblowers. Seemingly unaware of the practical consequences of its decision, the Supreme Court unanimously ruled to leave whistleblowers who report internally without critical protections under the Dodd-Frank Act.

Writing for Law 360, NWC Executive Director Stephen M. Kohn explains that employees now take grave risks in using internal compliance programs. In light of the Supreme Court’s decision, whistleblowers should hire an attorney and take their complaints directly to the Securities and Exchange Commission (SEC).


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Washington, D.C. November 28, 2017. Rejecting arguments by Senator Charles Grassley, the Securities and Exchange Commission (“SEC”) and numerous representatives from the whistleblower community, during today’s oral argument in Digital Realty Trust v. Somers (No. 16-1276), the U.S. Supreme Court Justices expressed support for stripping internal whistleblowers of protection under the Dodd-Frank Act (“DFA”).

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SEC anticipates paying an additional $221 million to whistleblowers in FY2018.

Washington, DC, November 16, 2017.  The Securities and Exchange Commission’s Office of the Whistleblower issued its annual report today. The Commission confirmed that “whistleblowers have provided tremendous value to its enforcement efforts and significantly helped investors.” It also confirmed that whistleblower disclosures have “directly” contributed to “hundreds of millions of dollars returned to investors.”
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