The SEC is expected to present the largest whistleblower award in its history – possibly $70.6 million or more to be shared by two whistleblowers in a case involving a former adviser at JPMorgan Chase – according to an SEC letter obtained by Financial Planning.

The forthcoming award is expected to be split between just two of six whistleblowers in cases that led to a record $307 million in regulatory fines against JPMorgan in 2015. The bank admitted it had been breaching its fiduciary duty for years by putting unwitting clients into the bank's own high-priced investments.

"Many times the government gets a bad rap," said former JPMorgan rep Johnny Burris, one of the six whistleblowers, who provided a redacted copy of the SEC letter. "With this award, the SEC and the [Commodity Futures Trading Commission] have done the peoples' work and they should be commended for that."

Burris, now an RIA in Surprise, Arizona, would not confirm if he was one of the award recipients. The SEC and JPMorgan declined to comment.

Still fighting his former employer in a case before a Department of Labor administrative law judge, Burris noted that whistleblowers deserve the awards they receive because they “put themselves in harm's way by possibly subjecting themselves to retaliation, blacklisting or worse."

In its preliminary decision, the SEC plans to give 18% of fines collected to a whistleblower identified only as Claimant #2, and 5% to Claimant #1.

Claimant #2 could receive up to $55.26 million and Claimant #1 could receive up to $15.35 million. The agency does not reveal the identities of award recipients.

Johnny Burris
Johnny Burris

It wasn’t immediately clear whether the amounts would be based on the $267 million in fines assessed by the SEC, or would also include the additional $40 million in fines by the CFTC. The SEC also indicated that additional penalties could be added to the calculation of the final awards.

APPEALS PROCESS
Any of the six whistleblowers have 60 days to appeal the commission's decision, which isn’t final until the conclusion of the appeals process.

Burris took to Twitter to share news of the commission's intentions. In a letter he tweeted, he thanked the SEC and CFTC for their "tireless pursuit of truth."

"Most whistleblowers are trying to protect [their employers] against unethical and/or illegal activities," he wrote. "That's also why most disclose unethical and illegal activities internally. That's precisely why preserving Dodd-Frank and Sarbanes-Oxley is important."

JPMorgan did retaliate against Burris, another regulator found earlier this year. Because the DoL's Occupational Safety and Health Administration awarded him only a small fraction of his claimed damages, Burris is appealing that decision.

While his OSHA case was underway, yet another regulator, FINRA, went after Burris on JPMorgan's behalf for a mere $624 client loss in which the clients themselves wrote an affidavit disclaiming allegations the bank made in their name.

The new award could equal nearly half of the $154 million the commission has given to 44 whistleblowers since launching its award program in 2011. The previous record was a $30 million award in September 2014.

Ann Marsh

Ann Marsh

Ann Marsh is a senior editor and the West Coast Bureau Chief of Financial Planning. Follow her on Twitter at @Ann_Marsh.