By Mary Hladky
Edward Siedle, the president of Benchmark Financial Services Inc., is in line to receive a second major whistleblower award.
The Commodity Futures Trading Commission informed him in February that he will receive $30 million for helping it make the case that JPMorgan Chase failed to disclose to wealthy clients that it was steering them into investments that would be most profitable for the bank.
JPMorgan Chase agreed in 2015 to pay $367 million to settle accusations that it improperly guided clients into its in-house mutual funds and hedge funds.
The CFTC award follows a Securities and Exchange Commission’s decision in July to award Siedle $48 million, also for providing information on JPMorgan Chase.
The SEC’s whistleblower award is its largest to date, eclipsing a $30 million award in 2014. The CFTC’s award also is its largest so far, exceeding a $10 million award in 2016.
Siedle has been called the “Sam Spade of money management” and “pension detective” for his work in investigating more than $1 trillion in retirement plan assets, uncovering flawed investment strategies and excessive fees paid to Wall Street firms hired to manage the funds, and plan mismanagement.
“This is great news for consumers and investors,” Siedle said of the awards. “A lot of people were concerned that under the [Donald Trump] administration that our federal regulatory agencies would not vigorously enforce the laws and whistleblower awards may be in jeopardy. These awards make it clear these agencies are open for business and are not backing away from their mission. …
“That is great news for me and other whistleblowers and great news for the public, too.”
Siedle has filed about 120 whistleblower claims with financial regulators, most with the SEC, he has said. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act directed the SEC and CFTC to reward whistleblowers who provide information that leads to successful enforcement actions resulting in sanctions of over $1 million.
Awards can range from 10 percent to 30 percent of recoveries.
The Internal Revenue Service and Department of Justice also have whistleblower programs.
Siedle, a former SEC attorney who founded Benchmark in 1999, said he has no big plans for the money.
“I certainly feel very fortunate,” he said. “However, I don’t anticipate it is going to change my lifestyle any.”