Regulators probe potential use by big banks of nondisclosure agreements to discourage whistleblowers: report
By Steve Gelsi
Commodity Futures Trading Association is seeking information from JPMorgan, Citigroup and Bank of America
Some of the largest U.S. banks are being asked by the Commodities Futures Trading Commission to provide details about nondisclosure agreements for employees in an effort to protect potential whistleblowers, according to a report by Bloomberg.
The probe is part of efforts by regulators to crack down on alleged use of confidentiality agreements by companies to chill reporting of potential wrongdoing.
Citing people familiar with the situation, the Bloomberg article said JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC) and Citigroup Inc. (C) have been contacted by the CFTC.
The banks have been asked to provide employment and customer agreements in their clearing and swaps operations to see if the contracts contain language that could hamper whistleblowers or if the documents make it clear that wrongdoing may be reported, the source told Bloomberg.
None of the banks currently face any allegations of wrongdoing, and the effort may not result in any action, the report said. JPMorgan Chase, Bank of America and Citigroup did not comment, the report said.
The CFTC in February said it had hired Brian Young, a former Justice Department prosecutor, to run its whistleblower program as part of an effort to encourage individuals to provide enforcement tips.
JPMorgan Chase in January agreed to pay an $18 million fine without admitting or denying charges made by the U.S. Securities and Exchange Commission that it violated whistleblower-protection rules with its confidentiality agreements during a three-year period.
Also read: JPMorgan Chase fined a total of $348.2 million for 'inadequate' monitoring and market misconduct
Also read: Morgan Stanley hit with $249 million fine for block-trading fraud
-Steve Gelsi
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04-23-24 1525ET
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