SEC Investigates Broker Conflicts of Interest at JPMorgan


The SEC is investigating JPMorgan asset managers for whether they improperly steered managed pensions and other clients to bank products. The probe is seeking information on whether the bank put its own interests ahead of its clients and whether it adequately disclosed its policies and compensation practices.

It should come as no surprise that the Securities and Exchange Commission would have investigations in this area. The fiduciary duties of brokers and other investment advisors is a hot topic among regulators right now. The White House is pushing for changes to the Department of Labor rules for how investment advisors oversee retirement accounts. SEC Chair Mary Jo White at the beginning of the month also expressed her support for a uniform fiduciary standard.  Additional information about these developments can be found on our prior blog post.

The Bloomberg article says that the investigation has been going on for about two years but has ramped up in the past few months. The Office of the Comptroller of the Currency is reportedly also involved.

This could be an area ripe for an SEC whistleblower to submit a tip. In a February speech, Julie Riewe, co-chief of the SEC Enforcement division’s asset management unit, said that the SEC expects to recommend enforcement actions in an number of conflicts cases. Since Congress passed the Dodd-Frank Act in 2010, the SEC has been authorized to pay awards to individuals who provide information to the SEC that results in monetary sanctions of more than $1 million. So far, the securities regulator has handed out a total of approximately $50 million in rewards.

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