JP Morgan Chase (NYSE:JPM)
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By Henry Cutter
A whistleblower who alerted regulators to conflicts of interest at JPMorgan Chase & Co. will get $30 million from the Commodity Futures Trading Commission, the largest CFTC payout to a tipster to date.
Edward Siedle, a former Securities and Exchange Commission lawyer who does forensic investigations in the investment-management industry, said he alerted regulators to the JPMorgan Chase matter and handled whistleblower claims at both the CFTC and SEC on his own behalf.
Separately, the SEC has granted preliminary approval for a $48 million payment to Mr. Siedle, he said. That payout is awaiting final review by the SEC staff and approval from the agency's commissioners.
"The things go on for years," Mr. Siedle said. "I do a lot of work that's not exactly pro bono, but I do it for less than my full fee. For me, it's validation of my business model" of investigating potential wrongdoing in investment management, he said of the $78 million he stands to collect.
The SEC and CFTC declined to comment. The CFTC said in a statement announcing the payout that it is barred by law from disclosing information that might identify a whistleblower.
The matter dates back to 2011, when Mr. Siedle said he became aware of conduct that led to dual settlements between the bank and the regulators. In December 2015, JPMorgan Chase agreed to pay $267 million to the SEC to settle charges that its private bank and wealth-management units failed to disclose to customers conflicts of interest regarding the funds and share classes where client money was invested.
The total included a $127.5 million penalty; $127.5 million in disgorgement, or repayment of money gained through the wrongdoing; and $11.8 million of interest.
The CFTC was involved because some of the client money was in commodity-related investments. In addition to the 2015 SEC settlement, JPMorgan Chase agreed to pay the CFTC $100 million: a $40 million civil penalty and $60 million of disgorgement.
A bank spokesman said at the time that the problems weren't intentional, and that it had improved its disclosures. JPMorgan Chase declined to comment on Thursday.
Bloomberg News earlier reported that the $30 million CFTC payout stemmed from the JPMorgan Chase case.
The payout was the fifth since the inception of the CFTC whistleblower program, which was established under the 2010 Dodd-Frank Act. The previous top payment was for "more than $10 million" in 2016, the CFTC said.
"This award makes it pretty clear that they are serious about their program," Mr. Siedle said of the CFTC.
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(END) Dow Jones Newswires
July 12, 2018 15:08 ET (19:08 GMT)
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