Levy Rivers's Library tagged whistleblowing →  View Popular

Here's how it works:

1. An insider client transfers all or a portion of their company stock into
a JP Morgan Securities Inc. brokerage account.

2. The insider then develops, in conjunction with the 10b5-1 team, a
'phased, pre-planned sales program to be executed at either market or
specified prices'.

3. Depending on the information available to the insider (but not the
public), the insider can decide whether to execute the sale or not.

By gaming the system this way, JP Morgan teaches insiders how to
use their knowledge to create a rigged market, one in which it is
the "house" that always wins, and the small investor that always
loses

Those provisions primarily applicable to privately held companies include:





1. Whistleblower Protection - Persons providing information about the commission of a federal offense are protected.  Those who retaliate against such whistleblowers are subject to fines and may even get up to 10 years in prison.
   
2. Document Destruction - If any company is being investigated by a federal agency, including the IRS, anyone destroying documents faces fines, plus up to 20 years in prison.
   
3. Securities Fraud - The time to make claims is extended to 5 years from the date of fraud or 2 years after it is discovered.
   
4. Bankruptcy Implications - Security Law violations are no longer dischargeable in bankruptcy.