Reporting and opinion by Mathew Carr

Feb. 23, 2024 — You decide whether JPM Chase CEO Jamie Dimon should resign from his role. I reckon he should consider it … based solely these facts below (I don’t know all the facts). Please msg mathew@carrzee.net to comment, especially if Google Gemini or the SEC has messed it up:
Key allegation from SEC in my opinion:

JPM Securities violated Rule 21F-17(a) under the Securities Exchange Act of 1934, a whistleblower protection rule that prohibits taking any action to impede an individual from communicating directly with the SEC staff about possible securities law violations.

According to a MarketWatch story published last month…While Dimon, nearing 70, has not announced any immediate plans to step down, he’s the longest-serving chief executive of the country’s largest bank, with 18 years in the job.

https://www.marketwatch.com/story/jpmorgans-jamie-dimon-shuffles-top-management-in-potential-stage-setting-move-for-a-successor-d48d32be

Here is the whistleblower sanction email/press release from the Securities Exchange Commission:

J.P. Morgan to Pay $18 Million for Violating Whistleblower Protection Rule

Firm’s confidential agreements impeded clients from communicating with the SEC

FOR IMMEDIATE RELEASE
2024-7

Washington D.C., Jan. 16, 2024 —

The Securities and Exchange Commission today announced settled charges against J.P. Morgan Securities LLC (JPMS) for impeding hundreds of advisory clients and brokerage customers from reporting potential securities law violations to the SEC. JPMS agreed to pay an $18 million civil penalty to settle the charges.

According to the SEC’s order, from March 2020 through July 2023, JPMS regularly asked retail clients to sign confidential release agreements if they had been issued a credit or settlement from the firm of more than $1,000. The agreements required the clients to keep confidential the settlement, all underlying facts relating to the settlement, and all information relating to the account at issue. In addition, even though the agreements permitted clients to respond to SEC inquiries, they did not permit clients to voluntarily contact the SEC.

JPMorgan, $JPM, Chief Executive Officer Jamie Dimon and his family have sold $150 million worth of the bank's stock, following through on last year's announcement that he would begin selling shares for the first time, per Bloomberg.

— unusual_whales (@unusual_whales) February 23, 2024

“Whether it’s in your employment contracts, settlement agreements or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of wrongdoing,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “But that’s exactly what we allege J.P. Morgan did here. For several years, it forced certain clients into the untenable position of choosing between receiving settlements or credits from the firm and reporting potential securities law violations to the SEC. This either-or proposition not only undermined critical investor protections and placed investors at risk, but was also illegal.”

“Investors, whether retail or otherwise, must be free to report complaints to the SEC without any interference,” said Corey Schuster, Co-Chief of the Enforcement Division’s Asset Management Unit. “Those drafting or using confidentiality agreements need to ensure that they do not include provisions that impede potential whistleblowers.”

The SEC’s order finds that JPMS violated Rule 21F-17(a) under the Securities Exchange Act of 1934, a whistleblower protection rule that prohibits taking any action to impede an individual from communicating directly with the SEC staff about possible securities law violations. Without admitting or denying the SEC’s findings, JPMS agreed to be censured, to cease and desist from violating the whistleblower protection rule, and to pay the $18 million civil penalty.

The SEC’s investigation was conducted by Marie DeBonis and Jessica Neiterman, with assistance from John Farinacci, and supervised by Virginia Rosado Desilets, Brianna Ripa, Mr. Schuster, and Andrew Dean, all of the SEC’s Asset Management Unit. Rua Kelly of the Trial Unit also assisted in the investigation.

The SEC strongly encourages the public to submit any tips, complaints, and referrals via https://www.sec.gov/tcr. 

Fines (not fact checked) from Google Gemini

Here are some of the biggest fines paid by JPMorgan Chase during the past 20 years, along with the offenses:

1. Misleading Investors on “Toxic Mortgages” – $13 billion (2013)

• This was the largest fine ever imposed on a single company at the time and involved JPMorgan Chase misleading investors about the quality of mortgage-backed securities, contributing to the 2008 financial crisis.

2. “London Whale” Trading Scandal – $921 million (2013)

• A trader nicknamed the “London Whale” made unauthorized bets that resulted in $6.2 billion in losses for the bank. The fine included violations of risk management and internal controls.

3. Manipulating Precious Metals Markets – $920 million (2020)

• JPMorgan Chase was accused of spoofing and manipulating precious metals markets for over a decade, impacting gold, silver, platinum, and palladium prices.

4. Foreign Exchange Manipulating – $614 million (2012)

• The bank was found to have colluded with other banks to manipulate foreign exchange rates through a scheme known as “The Cartel.”

5. Bernie Madoff Ponzi Scheme – $2 billion (2014)

• Although not directly involved in the fraud, JPMorgan Chase was fined for failing to prevent Bernie Madoff, a client, from using their accounts for his multi-billion dollar Ponzi scheme.

6. Anti-Money Laundering Deficiencies – $1.7 billion (2014)

• The bank was fined for failing to prevent money laundering by high-risk clients, including those linked to organized crime and drug trafficking.

7. Mortgage Abuses – $5.3 billion (2012)

• JPMorgan Chase was accused of various mortgage abuses, including robo-signing foreclosure documents and misleading borrowers about loan terms.

8. Investor Protection Violations – $3.5 billion (2008)

• The bank was accused of mishandling customer accounts and failing to disclose conflicts of interest to investors.

It is important to note that this is not an exhaustive list, and JPMorgan Chase has paid numerous other fines for various offenses throughout the past 20 years. You can find more information on their violations and penalties through resources like Violation Tracker (https://violationtracker.goodjobsfirst.org/?parent=jpmorgan-chase&order=pen_year&sort=).

My summary in order of magnitude