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Thoughts On The JPMorgan Whistleblower Complaint

Thoughts

This recent post highlighted the whistleblower complaint filed by a former employee of JPMorgan (Shaquala Williams) in connection with the 2016 Foreign Corrupt Practices Act enforcement action against the company.

As described in the prior post, the JPMorgan enforcement action was based on alleged improper hiring and internship practices that the U.S. government labeled bribery and corruption. The DOJ portion was resolved through a three year non-prosecution agreement involving JPMorgan Securities (Asia Pacific) Limited (“JPMorgan-APAC), a wholly subsidiary of JP Morgan, which involved a variety of requirements and undertakings imposed upon the company – as is typical in resolving FCPA enforcement actions.

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FCPA “Tips” Continue To Be A Minor Component Of The SEC’s Whistleblower Program

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The Dodd-Frank Act enacted in July 2010 contained whistleblower provisions applicable to all securities law violations including those under the Foreign Corrupt Practices Act.

In this prior post from July 2010, I predicted that the whistleblower provisions would have a negligible impact on FCPA enforcement. As noted in this prior post, my prediction was an outlier (so it seemed) compared to the flurry of law firm client alerts predicting that the whistleblower provisions would have a significant impact on FCPA enforcement. Many FCPA Inc. participants seemed so eager for a marketing opportunity to sell compliance services, that some even called the generic whistleblower provision the FCPA’s “new” whistleblower provisions.

Whatever your initial view was on how the whistleblower provisions may impact FCPA enforcement, it was previously noted that the best part of the whistleblower provisions was that its impact on FCPA enforcement could be monitored and analyzed because the SEC is required to submit annual reports to Congress.

Recently, the SEC released its annual report for FY2021 and, like the prior ten years, FCPA “tips” continue to be a minor component of the SEC’s whistleblower program.

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Former JPMorgan Employee Files Whistleblower Complaint In Connection With 2016 FCPA Enforcement Action

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As highlighted here and here, in November 2016 JPMorgan (and related entities) resolved a $202.6 million DOJ and SEC Foreign Corrupt Practices Act enforcement action based on its alleged improper hiring and internship practices that the U.S. government has labeled bribery and corruption.

The DOJ action was resolved through a three year non-prosecution agreement involving JPMorgan Securities (Asia Pacific) Limited (“JPMorgan-APAC), a wholly subsidiary of JP Morgan, which involved a variety of requirements and undertakings imposed upon the company – as is typical in resolving FCPA enforcement actions.

Recently, Shaquala Williams (a former employee of JPMorgan in New York city) filed a civil complaint in federal court (S.D.N.Y) against JPMorgan. In summary fashion, the complaint alleges:

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Potpourri

Potpourri

A bounty and a disclosure.

Bounty

Earlier this week the SEC released this order determining that a whistleblower is to receive approximately $3.5 million. According to the order: “Claimant alerted Commission staff of alleged securities laws violations, prompting Enforcement staff to expand an existing investigation into an additional geographic area. Claimant, a foreign national, also provided significant assistance to Commission staff by traveling to meet in person with staff, identifying an important witness, and providing multiple supplemental submissions that assisted the Commission in bringing the charges in the Covered Action.”

Pursuant to relevant law, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity. However, attorneys Andy Rickman and Christopher Connors confirmed that they represented the individual and that the award related to the Juniper FCPA enforcement action.

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In Connection With The Panasonic FCPA Enforcement Action, The SEC Awards A Whistleblower $28 Million

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As highlighted in this prior post, in April 2018 the DOJ and SEC announced a parallel Foreign Corrupt Practices Act enforcement action against Japan-based Panasonic Corp.  and a U.S. subsidiary Panasonic Avionics Corp. (PAC) pursuant to which the entities agreed to pay $280 million.

According to the government, PAC employees, including senior executive, engaged in a scheme to retain consultants for improper purposes other than providing actual consulting services. In one instance, PAC executives negotiated a consulting position with a senior contracts official at a Middle East airlines at the same time the alleged “foreign official” was involved in negotiating a contract amendment on behalf of the airline with PAC. In other instances, PAC employees concealed use of sales agents in Asia, some of which did not pass PAC’s internal diligence requirements.

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