JPMorgan Chase & Co. broke a federal whistleblower protection rule through agreements with customers that barred them from proactively reaching out to the Securities and Exchange Commission when they accepted a settlement or a credit from the bank, the regulator alleged Tuesday.

The bank agreed to pay a $18 million fine to settle the probe without admitting or denying the SEC’s findings.

From March 2020 to July 2023, JPMorgan used legal language that made customers promise “not to sue or solicit others to institute any action or proceeding against” the firm when a customer accepted a settlement or credit from the bank worth more than $1,000, according to the SEC order. At least 362 JPMorgan customers signed such agreements, and the bank has since revised the language, the regulator said.

“We take our regulatory obligations seriously and promptly took action to resolve this issue,” a bank spokesperson said in a statement.

Under the agency’s rules, companies are explicitly and broadly prohibited from obstructing anyone from providing tips to the SEC. Hedge fund D.E. Shaw & Co. paid a $10 million fine last year over alleged breaches of whistleblower protections.

“Whether it’s in your employment contracts, settlement agreements or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of wrongdoing,” SEC enforcement chief Gurbir Grewal said in a statement Tuesday.

This article was provided by Bloomberg News.