Whistleblower Awarded $64 Million in JPMorgan Case
A former JPMorgan Chase employee, Keith Edwards, is about to receive nearly $64 million for whistleblowing. Much has been written recently about the Whistleblower program now administered by the Securities and Exchange Commission (“SEC”), by Edwards pursued a different route.
He filed suit against the investment bank under the “qui tam” provision of the False Claims Act (“FCA”; also called the “Lincoln Law”). That provision allows individuals who are in no way associated with the government to file legal actions on its behalf.
If the action prevails, the whistleblower will receive part of the damages eventually assessed. That portion is not small; it can be as high as 15 to 25 percent of the judgment.
Typically, an FCA whistleblower, called a “relator,” is someone with intimate knowledge of the fraud at the heart of the action. Edwards, who lives in Louisiana, had worked for JPMorgan or its predecessors between 2003 and 2008, supervising a government insuring unit. In his position, he witnessed thousands of applications for Federal Housing Administration or Department of Veterans Affairs submitted by the investment bank. Unfortunately, they did not qualify for the government guarantees sought and granted. When the loans went bad, resulting in foreclosures, the government lost money.
Aware of this fraudulent activity, and evidently able to document it, in early 2013 Edwards brought suit against JPMorgan on behalf of the federal government; the Department of Justice later joined him as a plaintiff.
Although the FCA is not well-known to most people, it has its roots in English law dating back to the fourteenth century. In modern times, it has proved to be a useful tool for the government. Since 1987, it has recovered more than $24 billion thanks to the efforts of qui tam relators.
Naturally a qui tam suit entails some initial expense on the part of the relator. Individuals not wishing to incur that kind of cost, unable to find an attorney willing to take the case on contingency, or unwilling to expose themselves to the possible consequences of going public with the information in question have other options. One is the SEC’s Whistleblower program. Tipsters may submit their information and file for an award on their own, or may turn to an attorney who can help guide them through the process.
So far, the SEC program, instituted in 2010, has not resulted in the kind of payouts enjoyed by Edwards and some other FCA relators. But as it ramps up, and more whistleblowers with highly desirable information come forward, it is likely the awards granted will increase in size.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855