Merrill Lynch beats JPMorgan

March 14, 2018
Hire a regulator?
March 29, 2018

Merrill Lynch whistleblowers make more than JP Morgan’s!

Was it only last month that we were boggled by the $30 million the Commodity Futures Trading Commission (CFTC) paid out to whistleblowers in recognition of their role in the Commission securing a record $367 million asset-management settlement?

Indeed, it was.

And that eye-popping award came on the heels of the Security and Exchange Commission’s (SEC) $61 payout to other JP Morgan whistleblowers – awards that eclipsed the SEC’s previous record of $30 million paid to an anonymous whistleblower in 2014.

 Are you paying attention? Bigger money is at stake.

The SEC kicked off the week with an $83 million award to three Merrill Lynch insiders – the biggest-ever payout (until next week??). The three whistleblowers were key to providing information that helped the agency win a $415 million settlement from Bank of America Corp. for engaging in complex transactions that reduce the amount of client funds set aside for reserve accounts.

Two of the people will split $50 million and a third will get more than $30 million for providing help in the same case. BloombergMarkets Reporter Matt Robinson reported that “a substantial part” of the award will be donated to charities…

Does whistleblowing pay?

Apparently. Given the recent sizeable payouts, the three will take home more than Jamie Dimon…According to Jane Norberg, Chief of the SEC’s Office of the Whistleblower, “These awards demonstrate that whistleblowers can provide the SEC with incredibly significant information that enables us to pursue and remedy serious violations that might otherwise go unnoticed.”

Norberg added that the SEC hopes ‘these awards encourage others with specific, high-quality information regarding securities laws violations to step forward and report it to the SEC.”

For its part, Bank of America acknowledged disclosure lapses in informing wealth-management clients that it preferred to invest their assets in hedge funds and mutual funds managed by an affiliate and third-party funds that shared their fees with the bank. JPMorgan said the omissions in its communications were unintentional and that it has since enhanced its disclosures.

Does compliance still pay?

Depends on whether or not you’re willing to bet against the regulators or have hundreds of millions of dollars to spare. Do you? Do you, and your organization have enough cash to pacify the regulatory armada? Is it worth it the exposure, fines, and worse? That’s a question only you can answer. But that’s also where Patrina can help. We’ve built a business on helping organizations stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective and comprehensive, 8-module compliance solution, and compliant data capture, file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered.

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