On November 17, 2016 JPMorgan Chase & Co. agreed to pay $264 million to settle charges of securities fraud and violation of the Foreign Corrupt Practices Act (FCPA), including a $130.5 million disgorgement. According to the Securities and Exchange Commission (SEC) the firm influenced government in the Asia-Pacific region through corruption by creating a client referral hiring program that provided several officials’ friends and relatives with highly paid jobs and internships. Over the course of the last seven years, JPMorgan used this fraudulent program to unlawfully obtain at least $100 million in revenues by winning or retaining lucrative bank deals.
The various candidates were usually unqualified for the position for which they were hired for, yet not even a single referral hire request was ever denied. According to the Director of the SEC Enforcement Division Andrew J. Ceresney, JPMorgan used the improper hiring scheme as a form of bribery, blatantly violating the FCPA as well as the anti-bribery provisions of the Securities Exchange Act.
The bank opted to enter into a non-prosecution agreement and agreed a $264 million settlement that included a criminal penalty of $72 million even though they did not voluntarily disclose the conduct at issue. JPMorgan did, in fact, receive full credit for making foreign employees available through the whole criminal investigation and its cooperation that helped the United States government obtain critical documents not protected by privacy laws. An additional $61.9 million civil penalty was paid because of a consent cease-and-desist order issued by the Federal Reserve System’s Board of Governors.
The firm also agreed to pay a $105 million disgorgement to the SEC, plus $25 million in pre-judgement interests. This remedy ranks seventh among the biggest FCPA-related enforcement actions of all time, and is used to deter further violations of federal securities laws by depriving offenders of the money they gained illegally.
Article written by: Dr. Claudio Butticè, Pharm.D.
Do you have a valid claim?
If you witnessed any widespread suspicious activity within your workplace, you might have a chance of becoming a whistleblower by reporting an ongoing fraudulent scheme. However, to increase your chances of success, you must be sure to back up your claim with substantial evidence or privileged information.
A Quick Whistleblower Checklist
Is the fraudulent scheme widespread enough?
Has the fraud been perpetuated for years or involves large sums of money?
Do you possess any physical evidence of the fraud (documents, forged signatures)?
Do you have access to privileged information which may help our investigators?
Do you work as an insider within the company perpetrating the fraud?
Did you witness any ongoing illegal behavior within your workplace?
Have you been forced into taking part in any suspicious corporate activity?
