SEC Whistleblower Office Posts Notices for JP Morgan Recordkeeping Case, 11 Other Actions

On January 31, the U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower posted 12 new Notices of Covered Actions (NoCAs). Each NoCA relates to a successful enforcement action and signals that individuals may now file whistleblower award claims for those cases.

Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the SEC original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government.

One NoCA relates to an enforcement action taken against J.P. Morgan Securities LLC (JPMS), a broker-dealer subsidiary of JPMorgan Chase & Co. The SEC charged JPMS with the widespread and longstanding failure to preserve and maintain written communications. JPMS admitted to the recordkeeping failures and agreed to pay a $125 million penalty.

A second NoCA covers an action against the Nikola Corporation, a publicly traded company created through a special purpose acquisition company transaction. The SEC charged Nikola with defrauding investors by misleading them about its products, technical advancements, and commercial prospects. Nikola agreed to pay $125 million to settle the charges.

A third NoCA relates to an action against 1st Global Advisors, Inc., a registered investment adviser based in Texas. The SEC charged 1st Global, which is now known as Avantax Advisory Services, Inc., with “breaches of fiduciary duty in connection with advisory client mutual fund and money market investments that generated compensation for its affiliated broker.” 1st Global will pay disgorgement of $12,349,153, prejudgment interest of $2,524,000, and a civil penalty of $2,000,000 and also agreed to distribute funds to harmed clients.

The other nine NoCAs cover a wide variety of securities fraud, including a revenue manipulation scheme and the unregistered sale of microcap securities.

Whistleblowers have until May 1, 2022 to apply for an award for these newly posted NoCAs by submitting a completed Form WB-APP to the Office of the Whistleblower.

On January 21, the SEC awarded over $40 million to four whistleblowers. Since issuing its first award in 2012, the SEC has awarded approximately $1.2 billion to 245 individuals.


The Notices of Covered Actions

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