After a record number of enforcement actions brought by the SEC in 2015, the Commission’s leadership recently indicated that the SEC does not expect to see a decrease in these actions in 2016. SEC enforcement director, Andrew Ceresney
recently remarked, “I don’t think it’s going to slow down. In fact, I look at this year’s pace and I think it’s equivalent or exceeds last year.”
In 2015, the Commission filed 807 enforcement actions and collected $4.19 billion in sanctions, surpassing 2014’s record 755 enforcement actions and
$4.16 billion in sanctions. The Commission’s efforts in 2015 also involved a broad range of securities violations and many first-of-their kind
actions. As we previously reported,
we are witnessing the powerful impact of the SEC and its determination to utilize all tools at its disposal in order to uncover and prevent corruption.
One of the sharpest tools in the enforcement arsenal is, of course, whistleblowers. The information provided by knowledgeable insiders enables law
enforcement authorities to more expeditiously pursue high-value cases. As the number of whistleblower submissions and awards increase, and as the
SEC maintains this aggressive pace of enforcement, we are making great strides in the effort to establish a more transparent and ethical marketplace.
Today, the SEC announced that two J.P. Morgan wealth management subsidiaries
agreed to pay $267 million to settle charges in an enforcement action initiated by information brought to the SEC by a Labaton Sucharow client, a J.P.
Morgan executive. The enforcement is one of the largest and highest profile actions initiated by an SEC whistleblower since the establishment of the
The SEC’s investigation uncovered that J.P. Morgan’s investment advisory business and its nationally chartered bank were steering clients to more expensive
in-house investments without proper disclosures of conflicts of interests. The troubling actions in this case occurred over several years, and deprived
JPMorgan's clients of necessary information to make informed investment decisions.
This case powerfully demonstrates the vast potential of the SEC Whistleblower Program to find and eradicate wrongdoing early and often. Because of
the unique protections and incentives of the program, our client chose to report the securities violations at J.P. Morgan to the SEC. In doing so,
the individual was able to protect J.P. Morgan clients and improve the sales culture of the organization, while avoiding retaliation and blacklisting.
And as awareness of the SEC Whistleblower Program grows, so does the likelihood that more individuals will step forward to reveal violations. The program’s
broad international reach and ability to report anonymously provide enormous opportunities to uncover misconduct wherever it occurs. In designing this
innovative program, the SEC understood that employees represent a critical first line of defense against wrongdoing. To learn more about the SEC Whistleblower
Program, please see here.