[.J b7(1,
UNITED STATES
[J-= pro
SECURITIES AND EXCHANGE COM~ISSION
WASHINGTON, D.C. 20549,
OFFICE OF
INSPECTOR GENERAL
This document is subject to the provisions of the Privacy Act oH974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
MEMORANDUM
March 30, 2009
To: James Clarkson, Acting Regional Director
New York Regional Office
From: H. David Kotz, Inspector Gene~~K
Re: Referral of Report of Investigation: Case OIG-50 I
Disclosure of Nonpublic Information
Attached is our report of investigation of a NYRO Enforcement attorney who we found
disclosed non-public information to outside counsel, during an ongoing Enforcement
investigation.
This report is being referred to management for consideration of disciplinary action. In
order to ensure that we have the information· necessary to comply with our reporting
responsibilities, please advise us within 45 days what disciplinary action is taken, if any,
in response to this report.
Please understand that this report is confidential in nature and should be treated in a
secure manner. We request that when you are finished with the report you either shred it
or return it to us.
If we can be of further assistance to you, please do not hesitate to contact me.
Attachment
cc: Richard Humes, Associate General Counsel for Litigation and Administrative
Practice
Jeffrey Risinger, Associate Executive Director for Human Resources
William Lenox, Ethics Counsel
~ .J Assistant Regional Director
This document is subject to the provisions of the Privacy Act of 1974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
REPORT OF INVESTIGATION
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OFFICE OF INSPECTOR GENERAL
.Case No. OIG-SOI
Introduction and Summary of Results of Investigation
On October 17, 2008, the Securities and Exchange Commission CSEC" or
"Commission") Office of Inspector General COlG") opened an investigation as a result
of information received from Peter Sivere ("Sivere"), a former Surveillance Analyst in
the fixed income compliance group at JPMorgan Chase ("JPMorgan,,).l
In his complaint to the OIG, Sivere alleged that an individual on the SEC's New
York Regional Office ("NYRO") staff disclosed non-public information about his
contacts with the SEC to counsel representing JPMorgan, which was used against him in
a whistleblower action he had against the company.
In June 2004, while he was still employed with JPMorgan, Sivere, concerned that
JPMorgan was not fully cooperating with an ongoing SEC investigation into JPMorgan's
market timing, contacted NYRO staff and offered to provide e-mails to the SEC which he
felt were relevant to the SEC's investigation. In doing so, Sivere initially requested a
bounty from the SEC, but was told that in this case, any information he would provide
would not be eligible for a bounty.2 Nevertheless, Sivere turned over copies of e-mails to
the staff of the NYRO. Sivere was subsequently terminated by JPMorgan, for which he
filed a whistleblower complaint with the Department of Labor ("DOL") under the
provisions of the Sarbanes-Oxley Act.
o
In his complaint to the OIG, Sivere alleged that outside counsel representing
JPMorgan in the whistleblower action was informed by an SEC staff member that Sivere
had requested a bounty from the SEC. Further, Sivere stated that counseJ..for JPMorgan
divulged this information to the DOL as evidence against him in his whistleblower
action.
I Sivere worked for lPMorgan from 1998-2004.
2 Section 21 A(e) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.s.c. 78u-I(e)] authorizes
the Securities and Exchange Commission to award a bounty to a person who provides information leading
to the recovery of a civil penalty from an insider trader, from a person who "tipped" infonnation to an
insider trader, or from a person who directly or indirectly controlled an insider trader. Since the SEC's
investigation did not concern insider trading, Sivere was not eligible for a bounty.
This document is subject to the provisions of the Privacy Act of 1974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
The GIG investigation uncovered evidence that, contrary to SEC regulations,
NYRO staff attorney ( . . Jwas responsible for disclosing non-public
information about Sivere's requestlOr a bounty from the SEC to lPMorgan's outside
counsel and refers the matter to management for consideration of disciplinary action.
Scope of Investigation
The OIG took the sworn testimony of the following individuals:
r
-
I
yssistant Director at the NYRO;
(2) Peter Sivere ("Sivere"), Former lPMorgan Compliance Officer; and
(3)C J
In addition, OIG interviewedJ ), Department of Labor ("DOL")
"'
Investigator, C'· 1Attorney afOrrick & Herrington and Dennis
.. '--~-".-~
t
Attorney at Davis -Polk & Wardwell.
Statutes and Regulations Regarding Disclosure of Nonpublic Information
A. SEC Rules Relating to Investigations - 17 C.F.R. Part 203
17 CFR § 203.2 Information obtained in investigations and examinations.
Information or documents obtained by the Commission in the course of any
investigation or examination, unless made a matter of public record, shall be deemed
non-public, but the Commission approves the practice whereby officials of the Divisions
of Enforcement, Corporation Finance, Market Regulation and Investment Management
and the Office of International Affairs at the level of Assistant Director or higher, and
officials in Regional Offices at the level of Assistant Regional Director or District
Administrator or higher, may engage in and may authorize members of the Commission's
staff to engage in discussions with persons identified in § 240.24c-l(b)3 of this chapter
concerning information obtained in individual investigations or examinations, including
formal investigations conducted pursuant to Commiss;on order.
3 These persons identified in 17 CFR § 240.24c-1 (b) are: (I) a federal, state, local or foreign government
body or instnimentality; (2) a self-regulatory organization (SRO); (3) a foreign financial regulatory
authority; (4) the Securities Investor Protection Corporation; (5) a trustee in bankruptcy; (6) a trustee,
receiver, master or special counsel; (7) a bar association, state accountancy board or other federal, state,
- local or foreign licensing or oversight authority; and (8) a duly authorized agent, employee or
representative of any ofthe above persons.
2
This document is subject to the provisions of the Privacy Act of 1974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
17 CFR § 203.5 Non-public formal investigative proceedings.
Unless otherwise ordered by the Comm~ssion, all formal investigative
proceedings shall be non-public.
B. Commission Conduct Regulation -- 17 CFR § 200.735
17 CFR § 200.735-3
(b) A member of employee of the Commission shall not ...
(7) (i) Divulge to any unauthorized person or release in advance of
authorization for its release any nonpublic Commission document, or any information
contained in any such document or any confidential information:
(A) in contravention of the rules and regulations of the Commission
promulgated under 5 U.S.c. 552, 552a and 552b; or
(B) in circumstances where the Commission has determined to accord
. such information confidential treatment.
C. Securities and Exchange Commission Rule 19-1 Regarding Disclosure of Non
Public Information in Connection with Investigations, Examinations, or Grants of
Access, Aug. 21, 1999
This regulation sets forth the Securities and Exchange Commission's (SEC)
policy on disclosing non-public information developed in the course of its investigations,
inspections and examinations (ocotherwise) either to conduct those activities or to assist
a person to whom disclosure may be made under Rule 24c-l [17 CFR 240.24c-I]. This
regulation is promulgated to assist in the effective and efficient discharge of the SEC's
administrative, examination, enforcement, and oversight responsibilities, and is intended
to facilitate the SEC's investigation,s and examinations and its cooperation with those
persons to whom access may be granted, including State, Federal and Foreign
Governmental authorities. It is not intended to benefit, nor does it confer any rights upon
any individual or organization. This regulation is based on Section 24(c) of the Securities
Exchange Act of 1934 [15 U.S.c. 78x(c)]; Rule 24c-l; Rule 2 of the SEC's Rules
Relating to Investigations [17 CFR 203.2]; and the SEC's general ruIemaking authority
under the statutes it administers.
1. Policy.
a. Various SEC rules prohibit disclosure by its officers and employees of
information and documents or other non-public records of the SEC obtained in the course
of any examinations or investigations, unless the SEC authorizes or approves the
disclosure of such information or documents. In certain cases, however, the SEC has
3
This document is subject to the provisions of the Privacy Act of 1974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
authorized its staff to discuss, and grant access to, materials in its examination and
enforcement files and other non-public records..
b. The prohibitions against use of non-public information or documents without
specific authorization or approval by the SEC does not apply to the use of such materials
as necessary or appropriate by members of the staff in pursuing SEC investigations or
examinations, or in the discharge of other official responsibilities. For example,
documents obtained from a registered entity during an examination or from a witness
may be used in the examination of other witnesses or submitted for document analysis.
Similarly, testimony of a witness may be used in examining other witnesses. That is,
such information may be used to facilitate the development of SEC matters.
c. When the SEC authorizes the institution of actions, the staff is authorized to
use such non-public material in the action. When the SEC refers matters to the
Department of Justice, or when access is granted to non-public information or documents
. to any person identified in Rule 24c-I, the staff also is authorized to render such
assistance as may be required for the use of the information or documents by those to
whom access is granted. When requests for non-public materials are made during
litigation by respondents or defendants, or under other circumstances, and the staff is in
doubt as to the propriety of disclosing such material, it may present such matters to the
SEC for appropriate advice and authorization.
2. Responsibility and Authorization.
a. Officials in the Divisions of Enforcement, Corporation Finance, Market
Regulations and Investment Management and the Offices of International Affairs and
Compliance Inspections and Examinations at or above the level of Assistant Director;
officials in Regional Offices at or above the level of Assistant Regional Director; and
officials in District Offices at or above the level of Assistant District Administrator are
authorized to act in matters covered in this regulation.
.
b. For the purpose of this regulation, the term "SEC officials" means those staff
members designated in paragraph 2a. .
3. Confidential Nature of Information.
If publ ic disclosure of information given to a person under Rule 2 or Rule 24c-1
may interfere with enforcement or other activities of the SEC, the SEC official involved
will inform the recipient that the information must be treated as confidential, and cannot
be disclosed to the public without authorization by the SEC or by an appropriate SEC
official. The SEC official will obtain qppropriate representations of confidentiality.
4
-------------------------- ------------- -- ---
This document is subject to the provisions of the Privacy Act of 1974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
Results of Investigation
I. Background
A. Sivere's Role at lPMorgan During an SEC Investigation into the Company
On or about September 2003, the SEC Division of Enforcement ("Enforcement")
issued a subpoena for the production of documents to lPMorgan, pursuant to an
investigation they were conducting into illegal and unethical mutual fund trading by the
company. See U.S. Department of Labor ("DOL") Occupational Safety and Health
Administration ("OSHA") Final Investigative Report dated March 9,2006, attached
hereto as Exhibit I at 3; see also Transcript of Testimony of Peter Sivere ("Sivere Tr.") at
9, attached hereto as Exhibit 2. Sivere, who worked at lPMorgan as a Surveillance
Analyst,4 was part of the lPMorgan group responsible for retrieving e-mails that were
responsive to the SEC subpoena. Exhibit I at3.
Sivere testified that during one of his routine e-mail reviews, he uncovered an e
mail which he deemed related to the SEC's investigation of lPMorgan, and forwarded
that e-mail tohissuperiors.SivereTr.atI2-13. Sivere testified that he received no reply
or follow-up from his superiors, and thereafter became concerned that lPMorgan hadn't
produced the e-mail totheSECandthattherewasacoverupgoingon.SivereTr.atI4.
16, 18; Exhibit I at 10. lPMorgan, however, claimed that Sivere was not adequately
retrieving e-mails responsive to the subpoena, and took him off the project in November
2003. Exhibit I at 3.
Sivere took a leave of absence under the Family Medical Leave Act from March
2, 2004 to April 21, 2004, and upon his return to work, Sivere testified that he tried to
ascertain the status of the SEC investigation of lPMorgan and whether the subject e-mail
was provided to the SEC. Exhibit 1 at 3, 10-11; Sivere Tr. at 16. After a disagreement
with lPMorgan management about his office attendance, performance, the scope of his e
mailreview, and his improper rele'}Se of information to colleagues via e-mail, on lune I,
2004, lPMorgan management presentedSivere with the option of signing a release
package terminating his employment or returning to work under a written warning.
Exhibit 1 at 6. Sivere chose to return to work under the written warning, however, he
was ultimately terminated by lPMorgan on October 7, 2004 for accessing his superiors'
e-mails without authorization. Jd.at 4, 6.
4 In his sworn testimony, Sivere referred to his job with lPMorgan as Surveillance Analyst. Sivere Tr. at 5.
However, the Occupational Safety and Health Administration's Final Investigative Report states that he
worked as a Compliance Analyst from 1998 to 2004, and further specifies that he was promoted to Vice
President in 1999 and was promoted again in 2003 to team leader of E-Communications Compliance. See
Exhibit I.
5
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before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
B. Sivere's Contact with the SEC and Inquiry about the SEC's Bounty
Program
In between the time that Sivere returned to work in April 2004 and the time of his
termination from JPMorgan in October of that year, Sivere contacted the Commission via
e-mail on June 13, 2004, identifying himself as a compliance officer at a major bankand
stating that he had e-mails that he wanted to share with the SEC. Transcript of
Testimony o t [ ) t 9, attached hereto as Exhibit 3; see also e-
mail dated June 13,2004 attached hereto as1:xhibit 4. .
L ...
JWho is currently an[ Jin NYRO's Office of
Compliance Inspections and Examinations, received Sivere's e-mail, and on June 14,
2 004, responded to it, stating, "We are ce~.)].!i:.in.te.rested in meeting to discuss this . ~
.
Lnformtion (sic) with you." See EXEibit 4.L_. h~!lJorwarded Sivere's e-mail to[ j
~_ Jand provided Sivere with f .. jcontact information. r. . J
Duringhis first telephone call with! 1
Sivere stated that he had e-mails from
JPMorgan relevant to the SEC's investigation and, according to\);ivere "inquired
whether he could get payment for the documents in return for providing the documents to
the SEC." L _1 see also Sivere Tr. at 24. L lresponded that the SEC
does not generally pay for documents, but stated that he wou1(j check with his supervisors
about such a payment. L· -.JC -.Jcharacterized this initial conversation
with Sivere as "unusual," and reported it to his supervisors. Id.
C ~subsequently informed Sivere that he would not be paid for the
documents,and Sivere did not raise the issue again. ld. Shortly thereafter, within a week
or two, Sivere provided the JPMorgan e-mailstotheSEC.ld.atI3 .
C. Sivere's Whistleblower Lawsuit
Sivere confirmed in testimony that he took the internal JPMorgan e,.;mails around
June I, 2004, the date he was presepted with the release package 5 by JPMorgan
management. Sivere Tr. at 21-22. Subsequently, on July 26, 2004, Sivere filed a
complaint with the Occupational Safety and Health Administration ("OSHA") under the
whistleblower provision of the Sarbanes-Oxley Act, alleging that JPMorgan had
retaliated against him by presenting him with the release package after he voiced his
concern about JPMorgan withholding documents from the SEC. See Exhibit 1 at 2, 4;
Sivere Tr. at 32.
Sivere was later terminated from his position as Surveillance Analyst with
JPMorgan in October 2004 for inappropriately accessing his superiors' e-mails. Sivere
5 As noted in Section LA., supra, IPMorgan presented Sivere with a choice of either signing a release and
leaving the company, or remaining employed under a final written warning. See Exhibit I at 3.
6
This document is subject to the provisions of the Privacy Act of 1974, and may require redaction
before disclosure to third parties. No redaction has been performed by the Office of Inspector
General. Recipients of this report should not disseminate or copy it without the Inspector General's
approval.
testified that he believed he was being terminated in retaliation for his inquires about the
SEC's investigation of JPMorgan. Sivere Tr. at 17.
On or about May 4, 2005, OSHA issued a letter to counsel for JPMorgan in the
whistleblower suit, determining "that there is reasonable cause to believe" that JPMorgan
violated the Sarbanes-Oxley Act, and that~'preliminary reinstatement" ofSivere was
warranted. See May 4, 2005 Letter froml ]ofOSHA toL . ]
l jofOrrick, H~rrington & Sutcliff~ LLP, attached hereto as Exhibit 5. In
response to OSHA's letter,l.- J
outsIde counsel to JPMorgan, authored a May
27,2005 letter, to refute that Siverewas a whistleblower and to disclose new information
to OSHA investigator[l("the Orrick Letter"). [ J s t a t e d in pertinent part:
In making this finding, OSHA ignores that Complainant was hardly a
"whistleblower" as he alleges. Indeed, the SEC has stated, and encouraged
JPM to advise OSHA, that everything that Complainant provided to them
was previously provided to them by JPM. Unbelievably, Complainant
sought payment from the SEC to provide documents and information to
them outside of the normal scope of their investigation.
-1
See May 27, 2005 Letter from! .i, attached hereto as
.-J
Exhibit 6. L-
Calling the SEC's authorization to provide information "a very unusual step," the
Orrick letter goes on to state that "The SEC has also advised [JPMorgan] that
Complainant sought payment from the SEC for providing the SEC with documents. The
SEC has rejected Complainant's request." See Exhibit 6.
D. Sivere Discovers SEC Disclosure of Non-Public Information
Sivere was unaware of the existence of the Orrick Letter until he requested
documents under the Free )sat down with us and told us exactly what he
15 had said. He had found maybe 300 documents th3twe also did 15 wanted. We then understood what he wanted and we continued
16 review,but did not thinkwere on point to what the subpoena 16 with our searching.
17 was looking for. 17 Q What happened after that?
-
18 Again, 1 was approaching this request from a 18 A In particular, . I believe her name
-
19 compliance surveillance point of view and'not a litigation 19 was, and again that's all in the OSHA documentation
20 . point of view. Arid I was, in"my viewinever given that 20 Q' Can you spell that?
21 directive. Again, mybackground is in surveillai1ce; finding 21 A - to the best of my yeah, I believe it was
22
23
things, as opposed to litigation; which is different 'inmy
view, preparing for a lawsuit· I'm not One that understands
22
23
r_ -
Q Okay.
-:
-'
1believe waf"
l..
24 that 24 A'· She a1ert
What wa, _
---!Osition there, I'm sorry. 2 believe, has all the emails.
3 A Again, she was just a contract attorney. 3 Q Okay, and he's an SEC attorney?
4 Q Okay, this was a contract attorney, okay. 4 A Enforcement. I think he's -- yes, he's an
5 A Yes, yes. And I took the email and forwarded it to 5 attorney. I think he's in enforcement in New York City.
6 -, my superior, and: ·on the 6 Q Okay, so let me just, before we Jump ahead here, so
I - ......;
7 compliance end. I don't know if, at that point, I gave it to 7 any emails that you thought should have been brought to the
8 .x:cause I was using my superiors in compliance 8 attention of your superiors, you kept a copy of that,
9 as a go-between to the litigation department Shortly 9 correct?
10 thereafter, I don't remember, it was very shortly thereafter, 10 A Correct, or more so to the SEC.
11 we were all taken o~ the case completely. 11 Q Okay.
12 Q And why was that? 12 A I think at that time the head of enforcement who
13 A You know, again, I think if you look at the 13 sent out the subpoena was actually the head of lP Morgan
14 . investigation that the Department of Labor did it was just we 14 general counsel now.
15 weren't doing things adequately. We weren't producing, 15 Q '?
16 again, documents that he thought we should produce. 16 A Yes.
17 So I remember it was late in 2004 I guess at that 17 Q And that', _
18 point -- 2003, I get confused but they were going to 18 A I think so, yes. Now he's the general counsel of
19 tenninate four contract attorneys, and I had asked my 19 lP Morgan.
2a superiors that we did give thein cornmitment,.a verbal 2a Q So he sent somebody from his office from
21 commitment, to have them until the end of December, and being 21 enforcement sent a· subpoena requesting those emails, Is that.
22 that it was around the holiday time if we couldjustcorrnrut 22 right?
23 to finishing their term out, which they allowed, and they 23 A I believe so. I believe he signed off on it, if[
24 just helped in the general surveillance that I conducted on a 24 remember correctly.
25 day-to-day basis. And after December they were all 25 Q And then you per50nally forwarded thoseemails to
Page 14 Page 16
1 terminated. 1. the SEC, is that correct?
2 Q What happened with the email? 2 A After - there's a lillIe space ha::~. After the
3 A The email was forwarded, and that's where it was 3 FMLA.I came back to work, ~d two day~l~ I was ~Ied
4 bizarre. Nobody really followed u~ with us on that. We 4 into a conference room with\ ' and
5 found it It went to 5 somebody from HR I believe this was.a;; June I, 200~
6 Q You mean nobody from the JP Morgan side followed 6 And 1 remember now why they called me in because
7 up? 7 after my FMLA in May, I think 1 came back late April or early
8 A I mean~nobody ~e back and told me, Peter, this ~ 8 May, I was trying to follow up on where we were as far as the
9 is -I believe:
_.-. -.,
said, 1 think I remember now,he 9 investigation into market timing and late trading, and I had
10 sent it an email to' _ --:and said, • _ ,please 10 emailed, nobody really knew in my group, I had emailed the
11 review. 1don't know if this is anything new or there's any 11 assistants ot{ - - -/ -.o:and lthink ~t
12 new infonnation. Please no further emailcommWlication in 12
-. -
was it, asking I wanted to know where the status was, and I
13 this regard." And that was it. So that was the end of 13 got no response. So I didn't pursue it. I asked and didn't
14 it. At the end of 2004 I had a child. I had to 14 pursue. This was mid-May to late May.
15 takeFMLA. 15 And then I believe on June 1st 1 was called into
.r
16 Q Family Leave Medical Act (sic)? 16 the office witht~ mdsomebody
17 A Yes, yes, and I got approval for that. I was in 17 in HR 1 think her name was
18 contact with the office and I only lived a couple blocks 18 and they told me they weren'thappy with my performance; that
19 away. I also during that time was very still involved in 19 my perfonnance wasn't good, .or something a1ongthoselines.
20 what was going on on Wall Street and market timing, and 1 had 20 And they then presented me with a separation agreement.
21 read various reports and that email stuck in the back of my 21 I did.not speak in the meeting at aIL They gave
22 head, again, in particular 1 remember the SEC. or getting 22 me a couple days to think it over \lDd this.wasJune 1st. I I
23 involved in some kind of investigation. .• 23 didn't say anything in the meeting. I WeIlt and just looked
24 Q Now did you retain a copy of this email yourHlf! 24 at the tennination agreement, and I went to an attorney, ~--=-- .
25 A Which one? 1 retained copies of the emails and 25 f 1at Outten and Golden, D-u-t-t-e-n and
5 (Pages 17 to 20)
Page 17 Page 19
1 Golden, G-o-l-anes-oxley
7 . terminated for inappropriate use of email, bowever, on my U5 7 complaint.
8 it didn't say anything.. They just gave me a clean U5. So, I 8 Q - okay. For whlstleblowing?
9 subsequently lost the job. They're going to say it wasn't 9 A Correct
10 because of that, but it was because of that 10 Q Okay. And the Department of Labor Investigated
11 Q -okay. 11 that, correct?
12 A And then in oecember they told the Department of 12 A They opened an investigation, you know, in July and
13 Labor they made a mistake on my U5 and that they would fix it 13 I went back and forth with them, you know. giving them all
14 to say that I was·terminated for inappropriate use of email 14 information that I had.
15 so it coincided with my termination letter. They said it was 15 Q July 26, 2004, correct?
16 i an administrator error what they did 16 A Yes, yes.
17 Q Let's focus on what happened with the emails you 17 Q And the lead Investigator,..was that \-.
_.. "
18 -\ I' ,
sent to the SEC. Ail right, so you are now terminated from 18 A· The lead investigator was , _ Its·, _
19 JP Morgan Chase. The SEC has your emails, correct? 19 ':. It's .She was the
20 A Correct 20 person, I guess, that was assigned to me or I was assigned to
21
22
QWhat happened next with those emails?
A [don't know; .Qb;I.destroyed them.
21
22
her.
Q
,
And the supervisor was, I'm sorry,
-
23 Q . Okay, you destroyedthe JP Morgan enta!Is after 23 A That's correct
·24 you 24
Q' -
25 ~ A Yes 25 ACorrect.
9 (Pages 33 to 36)
Page 33 Page 35
1 Q Okay, so they did an investigative report into your 1 Morgan and Chase already gave that Information over so there
2 whistleblowing allegations, correct? 2 could be no whlstleblowlng, correct?
3 A This is the point I want to make. From July '04 to J A It wasn't relayed to me. It was relayed to the
4 May '05, that's almost, what, 10 months or so? 4 Department 0 f Labor.
5 Q Yes. 5 Q Well, to the DOL. But you got [nformatlon to
6 A Yeah, it's 10 months. JP Morgan or Orrick never 6 that
7 mentioned anything about the documents I had supplied to the 7 A Right, to that effect
B SEC I think that's important because 8 Q -effect.
9 Q At this point they still didn't know, correct? 9 A Like how could he be a whistleblower because
10 A -- no, they didn't know. They didn't know I 10 everything was turned over, and my point was,like, if you
11 supplied anything to the SEC I got to remember now. I 11 just told me that to begin with we would have avoided all of
12 don't know if I put it in one of my rebuttals to JP Morgan 12 this., You know, you're telling me now how many years later
13 that I was in contlct with the SEC, but I can't remember now 1J that you turned everything over. That's what [ was trying to
14 or not if I told JP Morgan that I supplied certain ernails. I 14 get to to begin with.
-
15 mean, I can go back to the lead investigative reports. I 15 Q So It could be that they actually did turn this
16 can't remember. 16 [nformatlon over to tbe SEC, the [nformatlon that you had
17 Q Okay, well I've got a copy of that investigative 17 already
1B the DOL final investigative report, it would be in there? 18 A It's possible, but [ don't know.
19 A Yeah, it's in there. My mind is just clouded now, 19 Q - you don't know.
20 but they might have known at that point that I had submitted 20 A I don't know because the Department of Labor never
21 to the SEC I just can't remember. But what's interesting 21 followed up with the SEC. And the other thing was that when
22 is that on May 27th they rebutted backwith, you know, - 22 I supplied the information to the SEC the investigation
23 Q Who's'they?' 2J formally closed on July 13, 2007.
24 A - 'they' meaning Orrick on behalf of JP Morgan to 24 Q Okay.
25 They said that, you know, and it's that language 25 A So how could they get the information in 2005 if
Page 34 Page 36
1 that [ showed you in the document. The SEC has advised and, 1 the investigation was still ongoing.
2 blah, blah, blah, that unbelievably, you know, [don't have 2 Q In other words, the Issue at hand [s how did
J thelanguage in front of me, but [ think it's highlighted for J somebody from the SEC gIve [nformatlon over to either JP
4 you. 4 Morgan and Chase -
5 Q Okay, let me get tbls for the record because 'blah, 5 A In 2005.
6 blah, blab' Isn't going to do any good. What yon're saying, 6 Q -In 7005 or Orrick and Herr[ngton [n 2005 if
7 and I think we dlscnssed this prior to the telepbonlc 7 there [s stili an active enforcement SEC Investigation, which
8 ,
testimony here today, Is that the law firm of Orrick and 8 In fact II a confidential [nvestlgatlon 10 therefore no one
9 Herrington got back to you basically sayiug that tbe 9 should, have given Information over to JP Morgan and Chase or
10 information that you bad provided to the SEC as part of wbat 10 to Orrick and Herrington prior to the Investigation being
11 you call wblstleblowlng that In fact JP Morgan and Cbase bad 11 close?
12 already turned that Information over to the SEC. 12 A Absolutely.
13 A That's what it said in their reply and it was a 13 Q And I think I may bave rambled there, but I think
14 reply tal and among other things it said that I had 14 we got everything. That's what you're trying to say.
15 requested payment. The problem isn't that. That 15 A And at that point because it was right after the
16 investigation was ongoing, so [ don't know how JP Morgan and 16 preliminary determination against JP Morgan, I engaged the
17 Orrick got that information. 17 SEC. I even called! ,3aying, look,
-
18 Q What Investigation? The SEC's Investigation? 18 something's not right here.
19 A No, the SEC investigation was still going on. This 19 And again and again she told me it's a confidential
20 was in regards to my OSHA, my Department of Labor 20 information and that she can't disclose any information. My
21 Q All rlgbt, you mean the OSHA Investigation was not 21 point being if JP MOrg3n or Orrick called the SEC they should
22 completed yet, but 22 have gotten the same,treatment and I don't think they did. I
23 A - and neither was the SEC investiption. 23 think, obviously, somebody talked to them.
24 Q - but the Information tbat was relayed back to yon 24 Q All rlgbt, and that Is the Crull of the matrei"liiid
25 was that, well, wbatever Mr. Sivere gave over to the SEC. JP 25 that,ls why we were talking today. I know we discussed a lot
10 (Pages 37 to 40)
Page 37 Page 39
1 of foundation, a lot of employment Information with JP Morgan 1 Labor, the only new information that was there was the fact
2 and your career there, and as I told you before that 2 that the SEC had contacted JP Morgan regarding me asking for
3 obviously along those lines would be out of my jurisdiction, 3 payment, the SEC denying payment, and basically saying all
4 but what you are concerned with Is, did anyone from the SEC 4 the documents were turned over. He never confirmed that
5 give out Information to either the law firm that was 5 information.
6 representing JP Morgan, meaning Orrick and Herrington, or 6 Also I had sent you a link earlier this morning. I
7 directly to JP Morgan and Chase while there stili was an SEC 7 don't know if you saw it There was a lead attorney at the
-
8 Investigation going on. 8 Department of Labor named ~ - and
9 A Both and SEC and a Department of Labor SOX 9 that's who interviewed me with my attorney at the time. We
10 investigation. It was a dual investigation. 10 produced an affidavit and he seemed to hone in on the, you
11 Q And the DoL Sarbanes-Oxley Investigation going on. 11 know, the SEC, the bounty man, why did I ask for money.
12 A Correct. And that's the crux of it. Again. from 12 And I tried to explain to him that I did not ask
13 what I've showed you from the FOIA request, there doesn't 13 for money, that I thought this may have an insider trading
14 seem to be any documentation that I requested money or 14 case. I put Application for Award for Bounty, which is
15 anything along those lines. So this is what's got me 15 consistent to what's on the SEC website. I in no way, shape,
16 concerned. 16 or form asked for money. I asked him ifhe was familiar with
17 Q So as we sit here today, and obviously you're In 17 the bounty program. He said no. It just seemed a lot of his
18 New York and I'm here in D.C., the problem, the complaint 18 . focus was on thaI, and at that point nobody contacted the
19 that you're alleging, again, is you don't know for a fact If 19 SEC. I mean, I couldn't because everything was confidential.
20 someone from the SEC disclosed this Information while there 20 So the only people that know is Orrick Henington
-
21 were two non-publlc Investigations going on, one the SEC, one 21 because( -! the partner on the case, said I've
22 the DoL., to either JP Morgan and Chase or to Orrick and 22 asked her who at the SEC has told you this, and she said she
23 Herrington? 23 has no obligation, or ethical I believe, obligation to tell
24 A And more importantly I truly believe that a 24 me.
25 governmental investigator, if that's the case. :was 25 Q All rigbt, so you don't know one way or another if,
Page 38 Page 40
1 lied to, I've asked him to reopen this investigation. They 1 and the name Is! _. you have no way of knowing
2 refused to do it and that's why I've been bounced from the 2 one way or the other II', _ who's an attorney at
3 Department of Labor to the SEC. 3 Orrick and Herrington, knows one way or the other If someone
4 The SEC has been the only one willing to 4 from the SEC shared· that information with ber?
5 investigate this. The Department of Labor's stance is that 5 A Well, she had to because she presented that to'
6 the investigation is closed. They won't reOpen it. There's 6 f~ 1in the investigation, you know, that document truit [
7 nothing we can do and if you have a dispute with another 7 had sent you
8 agency. meaning the SEC. you need to deal with them. 8 Q Okay.
9 Q Okay. 9 A - where it clearly Slales that the SEC has
10 A But it's bigger than that because. you know again, 10 advised, you know, and it gives all these verbs I can't
il I think that questions on the investigator at the Department 11 believe. It's almost like the government is vouching on a
12 of Labor should have been asked. and again rrn concerned why 12 criminal. les like the government is vouching for JP Morgan
13 did that go back to the SEC. 13 and Orrick and, you know, it was beyond me.. I couldn't win.
14 Q Now why do you say "'lUI lied to? Because .14 [ couldn't get any infurmation out, and what was problematic
15
;i
he was told· that no one --- .-J
15 to me was that the Department 0 f Labor never issued a
16 A He neverfollowed - I asked him; he goes, you 16 final
17 never followed up with anybody at the SEC? I said, who at 17 Q Final report?
18 the SEC? They said the SEC had advised JP Morgan. And I 18 A - well, they did a final, but they did a
19 said,i_ J who at the SEC advised them during this 19 preliminaIy - the preliminary against JP Morgan but they
20 ongoing investigation? And he never followed up. 20 never said that JP Morgan did something wrong.
21 Q - well,..who told blm,who told the supervisory 21 Q!see.
22 Investlgator,'_ 1 who told him that the SEC had given 22 A And [mean, I had to get on with myIife. They
23 this Information over to JP Morgan or Orrick and RerriDgton? 23 never issued it so I
24 A Well, what happened was I think in a doclDnent that 24 Q Now
25. they supplied to their May 27th document to the Department of 25 A - decided to just settle the case.
11 (Pages 41 to 44)
Page 41 Page 43
1 Q - all right, so the case against JP Morgan has 1 investigative background to it that I finally wenl directly
2 been settled, correct? 2 to Mr. Ko~and asked him to please pay some allention to
3 A Negotiated settlement, yeah. Confidential in 3 this because I thought it was important. I thought that it
4 which, I mean, it's on the court record my U5 was cleaned - . 4 was in the same ball park as:._ _' you know, contact,
5 Q Was there any compensation awarded you? 5 inappropriate contact with SEC employees with outside
6 A -- there was, yes, and that's confidential. 6 counsel.
7 Q Right, well, I'm not going right, it's something 7 Q Right, right. And why
8 I need to ask, but It's my understanding also that you are 8 A I can't prove it but, you know, -'
9 currently In litigation, or you are currently suing 9 Q - right, and
10 A I did that I tried to do -- I think I discussed 10 A - it kind of spelled out there.
11 this with you last week because I'm trying to get who sent 11 Q -:- and again at the end of the day what you really
12 this information. 12 want to know Is did In fact lomeone from the SEC contact
13 Q - meaning when 'who sent this information' you 13 either 1P Morgan Chase or Orrick and Herrington specifically,
...
14 mean who from the SEC sent it to ? 14 probabIyL _ lnd give them Information that you
15 A
-
Right, and I went to court and what happened was we 15 bad already supplied to the SEC.
16 were in motion to dismiss because the statute of limitation 16 A Exactly. It's two-fold I want, again.
17 on defamation and slander is one year. My point being was I 17 I don't know if IP Morgan said that they sent the
18 couldn't bring a case back in 2005 because there was no way I 18 information to the SEC. I don't know because nobody told me.
19 was going to be able to prove it 19 You know, IP Morgan also said that they would not terminate
20 With the new information that I got in November 7, 20 somebody that blew the whistle. Well, you know what? They
21 2007 from'Mr. Humes,at the SEC in the general counsel's 21 did So there's not a lot of trust there. That being said
22 office, who also wrote to Congresswoman Maloney, was that 22 it's just one thing aside.
23 they can not find any information or evidence that'there was 23' Q Right, and I Just want to make sure as the lead
24 communication between the SEC and JP Morgan. 24 Investigator here on what we're talking about now, I want to
25 Q And that was the FOIA, correct? 25 make sure that I've covered your concerns here and what
Page 42 Page 44
1 A Correct, right. And that's the other thing. If 1 you're asking the Inspector general to take a look at.
2 IP Morgan back in 2005 wanted to get that information where 2 A Yes, and it's very, I think we talked about this, I
3 is their FOIA request because it wasn't available in 2005. 3 just wanted to frame the one issue. There's a lot of
4 I believe, and I think I mentioned this to you last 4 background to it. But there seems. to be information that I
5 Friday that it was a situation where somebody from Orrick or 5 gave to the SEC, just to the SEC, that was then released to
6 IP Morgan or a third party picked up the phone, made the calI 6 IP Morgan or Orrick.
7 to the SEC and relayed information that was incorrect. 7 Again, specifically when they say, you know, Mr.
8 Q Okay. Are you currently suingi , 8 Sivere used the name bountyman04, I don't deny that. I did.
9 .A .
No, that's over. It was the motion I was doing --- 9 It was when I first contacted the SEC. I did it anonymously
10 two things, _ I was suing( ~U1d also working 10 . and I did it in compliance with the bounty program. I
11 behind the scenes with the SEC to try to find out who said 11 believe they're taking that and spinning that as I was trying
12 this about me so if one thing failed I could continue with 12 to shake down the SEC. And it's absolutely not true and if
13 the other. 13 the SEC has a bounty program and they're not going to I
14 Q And that's why you contacted the inspector 14 know that they can't protect the identity of people, but if
15 general's office? 15 they're going to say that somebody that applies to the bounty
16 A Well, I've been in touch with the inspector 16 program is requesting money, then the SEC should do away with
-
17 genaal's office since 2005. I also believe thatl 17 the bounty program because it caused more harm than good.
18 r ~! I had given this information to her, even in 2005, 18 And that's my point.
19 .' and I know the inspector general's office is very busy. I've 19 Nobody mew and I, you know, nobody really knew
20 been reading reports. I read them a lot I'm looking 20 about the hounty program. It sounds bad, you know, bounty
21 forward to the one to Congress that should come out I guess 21 man. It's consistent with what'son the website. So, again,
22 next Friday. 22 I can say absolutely I did not request money. I didn't ask
23 I was concerned I don't ma~/ _ .---J 23 for money. I don't know of anybody at the SEC calling me up
24 was sitting on this because there was no action being taken. 24 and saying, Mr. Sivere, we're, you know, and~owfor
25 I spelled everything out. You know, there's so much 25 .certain what was produced to the SEC. I just don't know;
12 (Pages 45 to 48)
Page 45 Page 47
1 because it was an ongoing investigation at the SEC and they 1 A Thank you.
2 weren't going to tell me, so I was kind of shocked when it 2 Q - you're welcome.
3 came in as a rebuttal, you know, that they found out this 3 A I know you can't really answer this because I know
4 information. The only person that knew, o~ people, were the 4 these things work but is there a limeframe that I can ellpect
5 people at the SEC. 5 some kind of feedback? I'm sure you need to talk to other
6 Q Okay. Well, I appreciate your taking time out 6 people now.
7 because I know you're at work today to talk to me on the 7 Q Right, and our Investigations are confidential but
B • record. I don't have any other questions at this particular B we will be Issuing ~ whatever my findings are one way or the
9 time. I may, however, reach out to you again and as you know 9 other we will be Issuing, or I will be Issuing on behalf of
10 our investigations, they take some time, but I want to let 10 the IG's office, a report of Investigation when this is done
11 you know that I've gotten Information from you that I need 11 just to let you know.
12 and again what you are requesting Is was there In facta leak 12 A Okay.
13 from the SEC to either JP Morgan and Cbase and the law firm 13 Q I can't give you a definite tlmeframe because that
14 of Orrick and Herrington. 14 wouldn't be fair to you or me, but It will not be, you know,
15 A Correct. 15 it will be done as quickly as I can
16
17
. Q And so witb that said I don't have anything else to
add except tbank you very much for your time today and we'll
16
17
A I undel"Sland. I'm not holding you to anything.
Q - but as you know we spoke last week for the first
1B go from bere. Is there anything else you'd like to state? 1B time and I told you I want to get this thing moving as
19 A No, I think also I really rely oli a lot of the 19 quickly as possible.
20 information, again, you know, my mind's a little cloudy. I 20 AYes, you've been great about that.
21 answered everything just so you know to the best of my . 21 Q And that we are here, In fact, taking your
22 knowledge that I could remember, but I would really rely 22 testimony today. So I'm working to the best of my ability
23 heavily on the information that I had sent to you, especially 23 which I think
24 the investigative report because that was fresh at the time. 24 A I understand the pressure you guys are under,
25 . This is a couple years later. 25 believe me. Thank you and 111 get olTthe phone so you can
Page 46 Page 48
1 Q Sure, and I understand that and that's why I told
1 start working on this.
2 you at the beginning If your dates were a little ofllt's not
2 Q - all right. Well, let me just do this
3 a concern.
3 officially. We are off the record at 2:07 p.m., Friday,
4 A Yeah, iff inadvertently misdated something, but
4 October 24th. Thank you very much, Mr. Sivere.
5 it's clearly set out everything and it was a very well done
5 (Whereupon, at 2:07 p.rn., the interview was
6 report on the Department of Labor side so I feel pretty
6 concluded.)
7 confident. If there's some misses between hel"e and there
7 *****
B it's totally inadvel"lent so I just want to make that ,
8
9 clear. ," . But! did answer everything to the best ofmy
9
10 ability and factuaJ and I just want to also thank you for 10
11 taking the time tojust listening to all.the claims and once 11 ::
12 I talked to·Mr. Katz, you wrote a response within a half hour 12
13 and it gave me a little confidence back in the SEC from 13
14 what's been going on in my heart and mind over the last 14
15 couple of years, so I just want to thank you for taking the 15
.r
16 .time to investigate this forme and hopefully, you know, you 16
17 can figure out what's going on here because I sure .would like 17
IB to know, and I would also like to, at some point, expunge to 18
19 the recOrd now which is available to the public that t 19
20 requested some type of payment and it's not true and I want 20
21 it filled. 21
22 QOkay, and·l understand and that's why we're bere 22
23 " ~oday trying to get as much Information as pOsslblll and again 23
24 .1 appreCiate, your time, taking time out to talk to me today 24
25 and- ;~~.' 25
13 (Page 49)
Page 49
1
PROOFREADER'S CERTIFlCATE
2
3
In the Matter of:
4
GIG-SOl
5
Witness: Witness III
6
File Nwnber: GIG-SOl
7
Date: Friday, October 24, 2008
8
. Location: Washington. D.C. 20549
9
10
11
This is to certify that I, Michelle Yenchochic (the
12
undersigned), do hereby swear and affinn that the attached
13
proceedings before the U.S. Securities and Exchange
l 14
Commission were held acronling to the record and that this is
15
the original, romplete, true and aCCW'8te transcript that has
,
16
been rompared to the reporting 0; reconling acromplished at
17
the hearing.
18
19
20
21
22
(Proofreader's Name) (Date)
23
24
25
.
~
~-
Page 50
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TIiE UNITED STATES SECURITIES AND EXCHANGE COMMISSIJN 1 CONTENTS
2
In the Matter of: 3 WITNESS: EXAMINATION
) File No. OIG-501 I 4 5
OIG-501 ·1 5 L
6 EXHIBITS DESCRIPTION PAGE
WITNESS: Number 2 7 IG - I Notice of Rights 5
PAGES: I through 32 8
PLACE: Securities and Exchange Commission
I 9
100 F Street. N. E.
1
10
WashingtOfl, D.C. 20549 11
DATE: Thursday, October 30,2008 12
13
The above-entitied matter came on for hearing, pursuant 14
to notice, at I :46 p.m. 15
16
17
18
19
20
21
22
23
Diversified Reporting ServiceS, Inc. 24
(202) 467-9200 25
Page 2 Page 4
1 APPEARANCES: 1 PROCEEDINGS
2 2 MR. MORRlS: We're going to go on the record.
3 On Behalf of the Securities and Exchange Commission: 3 Today is Thursday, October 30th. The time is 1:42 p.m.
4 -.J Investigator 4 Could you please raise your right hand.
5 Securities and Exchange Commission S Whereupon,
6 Office of the Inspector General 6
7 100 F Street, N.E. 7 was called as a witness and, having been first duly sworn,
8 Room 2465 8 was examined and testified as follows:
9 Washington, D.C. 20549 9 Could you please state your name for
I
10 (202) 551-4524 10 the record?
11 11 THE WITNESS: (
:my name is l I'mi
"
12 On Behilif of the Witness: 12
13 J PRO SE (Via telephone) 13 an investigator here with the Office ofInspector General.
I
~,
14 Securities and Exchange Commission 14 The Office of Inspector General is conducting an
15 3 World Financial Center 15 . investigation of aI legations of unauthorized disclosure and
16 New York, NY 16 the caption of this investigation is OlG-SOI.
17 17 '1 as you can hear today because we're
18 18 doing this telephonically, your responses and statements
19 19 given today are provided after you have sworn an oath and
20 20 they will be taken down verbatim by the court reporter.
21 21 This is an official United States government law
22 22 enforcement investigation. The claims asserted in this case
23 23 are serious ones so it's very important that you tell me
24 24 everything you know about the matter at hand and are
25 25 completely forthcoming and truthful with me. Do you
1 (Pages 1 to·.
a9dc4cf6-b445-1f40-9a43-63a, .
Page 5 Page 7 ;
1 understand that? 1 of all the securities laws.
2
3
4
THE WITNESS: I do understand that
And before we went on the record I
told you that I was going to Introduce the Notice of Rights,
j
2
3
4
Q Wbo do you currently report to?
A
r
I currently report to' _ , She is my
branch chief. She is my immed iate supervisor.
~,
5 which you faxed over to me on 10129/08 and I'm going to hal' 5 Can you spell ber name for tbe record?
6 1
6 the court reporter mark that as IG No. I , A Firstname
7 (SEC IG Exhibit No. I was marked for 7
--'
L
8 identification.) 8 Q And prior to' vbo did you report to?
9 i Okay, the court reporter just marked 9 A Prior to Jmy i;mediate supervisor was
10 this as IG No. I, and what I'm holding here is the U.S. 10 ~ last nameL J There was a small
11 Securities and Exchange Cominission from the Office of 11 'p;riod in between the timd, lleft and : was
. ~ --.-J
12 Inspector General titled "Notice of Right," a two-page 12 appointed as my branch chief during which I reported directly
13 document with what looks like your signature dated 10129/08. 13 to an assistant director.
14 Do you recall signing that and faxing that over to me? 14 Q Wbo was tbat?
15 THE WITNESS: Yes, I do recall signing it and 15 A I ~Iieve during that period' it wasL
16 faxing it over to you yesterday. 16 ,There may also have been a small period during
17
18 -- Okay,- Ido you hl\ve any
questions or concerns regarding the Notice of Rights?
17
18
which I reported directly to ,another assistant director named
19 THE WITNESS: I do not. 19 Q Wbendid eave, if you know. You can be I
20 J Okay, thank you. 20 approximate.
'I.
~
21 EXAM INATION 21 A I believe left sometime early in 2005,
1
22 i 22 approximately January or February, ifmy memory serves me
I
23 Q All rigbt, 11'm just going to ask you a 23 correct.
24 couple of quick background questions. First of all, where d~ 24 Q Was; ~_'our bra ncb cbief during tbe time
25 you currently work? 25 period in question witb regards to Pete Sivere? i
---~~ . __._~~._~-_.---:._-_ . ._---_.._-_._- . . -------,.---------~-.--~--.-- ..--..f---------..-.---.. -..-----.--.----.------.-..--------'._--'-_.'._.. ~ ._. _.. . __.. _--.. . __.. _- ._ ~
Page 6: Page 8 I
1 A I work at the Securities and Exchange Commission's 1 A He was the branch chief! reported to, yes,
2 New York Regional Office located at 3 World Financial Centet 2 initially upon the initial investigation of this matter. The
3 in New York. I am in the enforcement division. 3 investigation continued for some period after
4 Q Wbat is your current tide? 4 left.
5 A My current title is senior attorney in the 5 Q And Sivere is spelled for the record 5-i-v-e-r-e.
6 enforcement division. At the time of this matter my title 6 A I don't recall ofihand.
§
7
8
was staff attorney.
Q
I
How long bave you been senior counsel at tbe SEC? I
7
8
Q I was just telling tbe court reporter. Wbo else
is in your brancb currently, otber staff attorneys?
~
J
'!
9 A I can't recall the exact date when my title 9 A astnameii! I
t
10 changed. I began working at the SEC in August of 2002. I 10 J first name is I
I 11 ~
I
11 believe approximately three years later mytitIe was changed don't have the spelling of his name oflhand.
12 to senior attorney. I also worked'as an intern at the SEC in 12 Q Tbat's okay.
13 the enforcement division for the summer of 200 I. 13 A I believe someone else just started recently,
14 Q Okay, and basically from staff attorney to senior 14 ) but I may be mistaken on his name and
15 attorney means you went from a 13 to a 14, is tbat correct? 15 don't have it unless you want me to refer to documents ir;
16 A That is correct 16 front of me Ilere.
it
17J Q And you are a licensed attorney? 17 Q No, that's fine. Who was in your brancb fi'"
18 A I am a licensed attorney in New York state. 18 time of 2004 and 5 when tbis original complaint
J.' ~
19 Q Any otber states that you're licensed in? 19 A For certain was in my''':·
20 A No, I'm only Iicensed in New York: state. 20 time. I don't recall offhand - noname is pt;
21 Q Wbat are yoiJrcuITent work, duties and it can be 21 head as to who else was in my branc~Irt"
22 brieOy, described brieOy. 22 Q Sure, okay, tbat's fine. Wb~,
23 .A As an attorney in the enforcement division I 23 core work hours?
24 investigate allegations of securities fraud and work with my 24 A Probably 9:30 to about 7:0(
25 cOlleagues to bring cases for violations that run the gamut 25 Q Okay. And wba~ is.,f
2 (Pages 5 to 8)
Page 9 Page 11
1 A 1 compliance officer at IP Morgan and that he had emails that
2 Q Tbat, of course, is·your work number. 2 he believed would be useful to an investigation we were
3 A That is correct. 3 conducting, the SEC was conducting, relating to IP Morgan
4 Q All righi, we're going to jump to tbe beart of tbe 4 Mr. ·Sivere then inquired whether he could get payment for the
5 allegations bere. When were you first contacted by Pete 5 documents in return for providing the documents to the SEC.
6 Sivere? 6 Q Okay, now wben you say 'payment for tbe documenu' i
~~
7 A I'm giving an estimate here keeping in mind this is 7 are you referring to tbe payment if you provide information i
8 a conduct that occurred about, say four years ago. 8 in an insider trading case tbat tbe SEC bas a bounty progra
9 Q I understand. 9 or, and I'll let you answer tbat firsL
10 A I believe it was sometime in the spring of 2004, 10 A There was no reference to any bounty program, nor
11 possibly in Mayor June of 2004. 11 was this iRvestigation at that time, in any way construed as
12 Q Okay. I just want you to do tbe best you can on 12 an insider trading investigation. It related to JP Morgan's
13 the dates. I understand tbat tbe conduct in question is 13 financing of Canary Capitals market timing and late trading
14 several years ago, so if you can't remember an exact date I 14 program. There was no reference to any insider trading in
15 definitely understand tbat. Wben you were contacted by Mr. 15 the conversation, nor was there any reference to the fact
16 Sivere? Wby was be contacting you? Wbat was tbat about? 16 that this request for payment was made pursuant to any
17 A I believe I first received an initial forwarding of 17 official bounty programs. Rather he was very clear that Mr.
18 an email through the office in D.C. that handles complaints 18 Sivere was requesting cash in return, payment in return for
19 directly from the public. I believe irs the Office of 19 the document, providing the very documents to the SEC.
20 Investor Assistance. I may have that name incorrect, but an 20 Q So tbe impression tbat you got from tbis call was
21 email was forwarded in which Mr. Sivere identified that he 21 tbat Mr. Sivere would turn over tbese emails if you paid him
22 was a compliance officer at a major bank and had emails that 22 some specific dollar amount, is tbat correct?
23 he wanted to share with the SEC I don't believe initially 23 A That is correct. No dollar amount was ever
24 he identified who he was. I believe that was the initial 24 mentioned, but he inquired as to whether or not he could get
25 information I received about Mr. Sivere. Subsequently, I 25 paid for providing these documents.
Page 10 Page 12
-,
1 believe ---- and I contacted Mr. Sivere. , 1 Q And when he asked you if he could get paid for
2 Q When you were contacted initially, was it by email? i 2 providing those documents, what did you say?
3 In other words, was there an email that was sent to investo~ 3 A I believe that my response was that the SEC does
4 complaints by Mr. Sivere? 4 not pay for such documents, but that I would immediately
5 A I believe that's correct. At some point I called 5 check with my supervisors.
6 Mr. Sivere back. I don't recall the sequence. I believe it i 6 Q Did you, in fact, chuk with your supervisors?
j
7 would.only make sense that I called him back after receiving I 7 A I did imme~iately because this was such an unusual
8 some basic information from the Office oflnvestor ASsistance I 8 conversation with someone. I immediately reported it to my "
9 in Washington.
I
9 s:pervisor,{_ land he may have had subsequent ~
10 Q Do you recall Mr. Sivere's tag line in his email? 10 conversations with his supervisor, secondary supervisor,
11 Do you recall something along tbe lines of bountyman or 11 I believe we immediately relayed
12 something like that? 12 back to Mr. Sivere, once again, that the SEC does not make
13 A Yes,he used an email address that was called 13 payments for any documents provided to it.
14 bountyman. There may have been some numbers on that. 14 Q When you told Mr. Sivere that the SEC could not
15 don't recal I. 15 give any dollar amount for these documents, what did Mr.
16 Q Okay. 16 Sivere say after that?
.i 17 A K personal email address that he had made up. 17 A I don't recall any response. He subsequently did
18 Q When you called him back, when you bad your first 18 provide documents to us so I don't think the issues was ever
~.
19 actual contact with him, what was the substance of tbat 19 raised again.
20 conversation? 20 Q Okay, do you think tbat be bad a misunderstanding
21 A IfI'm not mistaken, ( ,laRd I may have 21 of tbe so-epartmeDt of Labor tbat you bad already rece.ived tbe
documeDts from JP MorgaD tbat Mr. Sivere bad provided to you?
A I believe r informed the investigator that every
I~
10 discussed? ' 1 0 document that Mr. Sivere provided we had already received I
11 A No, I have not had any communication froni JP Morgj 11 pursuant to ow subpoenas to JP Morgan.
12 since this investigation ended and I believe that was 12 Q Okay, aDd as I asked you earlier, it was ooly a
13 sometime in late 2005. 13 matter of a week or two, thaI yoo received all tbe emails
....
14 Q Would that be the same for Davis Polk as well? 14 from JP MorgaD tbat you bad previously received from Sivere?
15 A In connection with this matter, yes. I routinely 15 A I believe that is correct That is correct One
16 deal with Davis Pol(in other investigations. 116 clarifying point, if I may add, and this may have been
17 Q Right, I understand that. Woold you like to make 17 misconstrued in the context of Mr. Sivere's allegations. We
18 any clarifying statements, or is there anything else that I 18 were not pleased with the speed of JPMorgan's production.
19 haven't asked you that would be helpful to further this 19 They were very slow at producing documents and were not very
20 investigation? 20 responsive initially to the SEes request in terms of timing
21 A No, I appreciate the opportunity to answer your 21 and location of all sorts of data.
22 questions on this. If there is anything further that you 22 So ow ilispleaswe with JP Morgan was very real,
23 need, or anyone else needs in connection, with this I'm 23 but it was not with respect to their holding back documents,
24 happy to assist and I just appreciate the opportunity to tell 24 just to their timetables of providing all sorts of
25 you everything I know about this. • 25 information to us. So while it is true that we were not
7 (Pages 25 to 28)
a9dc4cf6-b445-4f40-9a43-63acdOa15d10
Page 29 Page 31
1 pleased with IP Morgan, and in particular their in-house
PROOFREADER'SCERTIFICATE
2
counsel, this was related strictly to their timing and
2
3
production of witnesses and documents, not to any concerns we 3 In the Malter of: 01G-50 I
4 had that JP Morgan was holding back or not producing any
4 Witness: Number 2
5
documents that were subpoenaed. 5 FiieNumber: 01G-501
6 Q So the fact tbat Sivere as a compliance officer
6 Date: Thursday, October 30, 2008
7
called you and said tbat tbey were withbolding documents gav 7 Location: Washington, D.C
8 you a little bit more sense of urgency to contact JP Morgan
8
9
and let tbern ....-001'. as you statecJ before, witbout letting them 9
10 know tbat you bad been contacted by anyone from JP Morgan 10 This is to certiIY that I. Donna Raya. (the
11 tbat It's basically your understanding tbat JP Morgan was 11 undersigned), do hereby swear and affirm thaI the attached
iz bolding back Infonnation? 12 proceedings before the U.S. Sec.urities and Exchange
13 A No. I don't think JP Morgan was holding back 13 Commission were held accorc:ling to the record and thai this is
14 information and I don't think that Mr. Sivere necessarily the 14 the original, complete, true and accurate b'an.script that has
15 catalyst to our realizing ihat they were being slow in the 15 been compared to the reporting or recording accomplisbed al
16 investigation. I Couldn't say that that's the case. 16 the hearing.
17 Q Well,'tbey were being slow from day one, JP Morgan? 17
A I couldn't tell you whether it was from day one, 18
but at some point in the late December perhaps 19
NoveinberfDeCember of 2004 we were very displeased with the 20
of thek productio'ns and the pace at which they were
pace 21 (proofreader's Name) (Date)
}1"duCing witri~es and sort of the speed with which they 22
'
.~tre Wining toprovideusaccess 10 witnesses. But I don t 23
tOW if thaI was initially off the bat _ 24
\Q
, Okay. I d~~'tbeli~e I bave any otber questions
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25
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~ Page 30 i
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'!»u today and I think I'm rigbt on tbe money bere with
\ ,
'me that I. called it. Wire otJtbe m:ord at 2:30 p.m.
'tober 30; 2008. With tbat said I dOli't bave any otber
\ns' for you. Tbank you
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Subj: RE: "Application for Award of a Bounty"
Date: ~/1412004 3:45:53 PM Eastern Standard Time
From:
To: ~Q1!Dlim'§'DQ4@~gl'-3rn
CC:
'-
We are certainly interested in meeting to discuss this informtion with you. Please call eithe[
( .
'--
r
-----Original Message----
From: Bountyman04@aol.com [mailto: Bountyman04@aol.com]
Sent: Sunday, June 13, 2004 10:05 AM
To: ENFORCEMENT
Subject: "Application for Award of a Bounty"
Commission:
I am a Comp~ance Officer at a major broker dealer. I have in my possession, E-mails that mayor may not
be helpful to your examination of this broker dealer in connection with mutual fund transactions.
I would like the opportunity to meet and discuss the information I have to ensure that this broker dealer has
produced the E-mails that I have questions about I trust this can be done in a·confidential matter.
Please contact me via this E-mail address and let me know who I should contact. I am located in New
York. City and I am available ASAP.
Thank You
l
'------
\ \
Monday, June 14, 2004 America Online: Bountyman04
u.s. Department oflabor ~'Saf8ly'8ncnfeefllr
··201' \IaJtck.$tmet. Raom 870·
AdmInIstration
NewYcxk. N8W York 10014
Tel: (212)'337-238l5
'Fax:" (212) SS7-2371 .
May 4. 2005
-."
L __)
Orrick Heaington Sutcliffe ILP
666 Fifth Avenue
New York, NY 10103-0001
Re: . JP Motgan Chase I SiveIe 12-4173-()4:;{}36
Sec. 806 "SaJ:banes-Qxley At:t of"2002
VIA CERTIFIED MAlL1I7003 3UO 0004·Qt417007, RRR
'flease be advixd thattbe ioiIial phase of the iDvcstigationiDto the above-referenced
discrimioation complaint is completed. At this stage of the investigation, based'on tho ,.
, hUonnation gadiered thus far, OSHAhu ~ that there Is reasonable cause to'bdieve
tbat)'OUl' cllcmt. JP Morgan CIasC (RespOndent), has violated· Public Law 101'-204. Section 806
,. of the CotpOnlte and Cdm'9al Pmud A~ty Act of 2002. Title vm: of the SarbBDeS
.Oxley Actot2OO2, 18 U.S.c. Section lS14A (Sarbanes-Qxley Actor SOX). and.lbat
preliminary reinstarement of Complainant, Peter Sivere, is wmanted. Please be iulvised that
'OSHA '8 investigation of tbiunatter is ougoing and this letter does not constitute this ag~s
final reasonable cause ~tenniDation. Pursuant to 29 c.F.R. SectiOn 19BO.I04(e), this letter is
seDt prior to the issoauce of Findings and a Preliminary Order to provide DO~ee of the subst8lice
of the relevant allegations and offer you an OpponuDity to submit addilioual infmmatioo that you
, . wish to be con.sidered whilo OSHA contiimcsto -review this matter. All relevant information
"submittedin a timely fashioil will be fully cvaluatedbeforc OSHA d~nes that Findings and
a PrelimiDaIy Order should be issued. Sec 29 c.F.R. Socuon 1980.105.
Under OSHA's proc:cdures for tbc bandlin& of discdmiDation complaiDts under the Act. 29 cPR
, 1980.104(e).·you are hereby notified ofyour opportunity to submit rebuttal evidence. You may
submit a written response; meet with OSHA officials. and present Statomenm from rebuttal
witD.es. the administrative amstants ofbis"tbree
Supervis.OD, L ~ -= Jandt: . ... J iDquirlng about the emaiJs tbat had been
produced to tbe'SEC inrelaticn mi1sinquiry. Complainant states that he tDld,~ administrative
.assisbmts that he required the iufmmalioo in ordec to close out his files. which had remained
open after his abropt mnoval from the JXOioct in November 2003.
On June 1. 2004, CcmpIah1aut was presented with a cholco of either siguing a Iclease agreement
and leaving or remaining at the firm. but undeI' a final written' wamiDg for poor worlc
p~ Complainant believed that this was in tet8Iiation for assistina in the investigation
of Respondent by the SEC: CompIaimmt hired an attQmey, who, after negotiations with
Respondent, ad'Yised .Comp1aiDAnt dutt Respondent had refo8edto confiDn that it would give him.
a clean U-5. This threatened his livelihood, because it would. in effect, blacklist him and pmvent :
bbn from obtaiDiDg future employment ill the securities indostry. Complainant accordingly
decided to remain in his job. . .
Complainant states thai on or about Friday June 4, 2004. he c~ lof the .
Compliance Audit WJit and told him that be believed that Respondent was retaliating agaiDst him
.In violation of the Sarbanes-Oxley Att fur assisting in the SEC investigation.. Complainant went
on to state dutt the retaliation was because he had been trying to ascertain wbich emails
Respondent had 8Ubmi~ 10--.he SEC in respoose to its inqUiry into market timing aDd late
t
4'ading. He states that ~. ,reported this conveaation to his own boss. Complainant states
on
.that that Monday, Resporident informedCamplsinimt's lawyer that Complainant had been
placed on a paid lea~ of undetcnnined duration, wbileJUs allegations WCle ~ investigated.
BeginniDg on 100e 16. while he was on admiDist:catiw leave, Complainant oolDlQJlDieated several .
tiDies' with the SEC and provided it with emails thai he felt showed violations of securities laws..
Complainant.Jlleges that oa,or about luoe24. 2004, he was interviewed by Respondent's
inv~.r_. ~I who purpqrte4 to be investigating ~ allegations against .
Respondent. OnnphriuUDt alleges that _ 1w:ed him wbedJer he had proof that the
Res~thad DOt submitted aD relevant documents to the SEC. Acc~J!>Complainant, he
.. roJd __.lbat he had no independent proof and tbal be was r:elying on_ ;investigation to
address his allegations. ComplaiDant sta2t:s that based on 1bc tenor or[ Juestions. ho
. .began to doubt to whether a real investigatiOn was bciDg conduc;;ted.
On July 19, 2Q04.. following ResPODdent·~ inveatipdoo, Complainant numed to work ~
-the final written warning that he bad been presented with on June 4. 2004. nnance, and then demOted him. As a
result of the circumstmces predating this disciplinary action, OSHA has n-.aBOIlable cause to
believe that Complainant'. protected acti~ties contributed ro the adverse personnel action taken
against Complainant. .
. On Seprember 13. 2004, Respondent forwarded its position statement to OSHA in which it
8SSGI1Cd that Complainant had been disciplined for peIfomumce issues. specifically his refusal to
follow bis supcrvison' directives. R.espoodeau abo- stated th8t Complainant had on occasion
exercised poor judgment and·had failed to follow group attendance policies. These latter reasons
," - .. - for.disciplining Complainant appear pretextuaI because CompJainant'SllDDuaI performance
evaluations were exemplary from d1e time he was hired in 1998. Moreover, ~pJainant stares
I-
that despite his having' engaged in the same work habits prior to June'l 2004. his attendance bad
never been an i s s u 8 . " , ,
On September 15, 2004, while OSHA was investigating Comp1ajnant's complaint that be was
disciplined OJ! Iune I, 2OQ4. for engaging b1 activities protected undec Section 806. Complainant
-presented to! __ _ a copy of the emmls that he had provided to the SEC on ~UDO 16., 2004.
Complainant advised _ _lhat these were ~ emails about which he had been ooncemedand
that he bad provided die SEC.
On September 30. 2004, in an article in the WaD Street10l1l1lal entitled -rrading Class Action
Suit W~" Respondent was reported to have aDegedly helped Canary Capital Panners ILC
~ trade in mutual funds at the expense of ontimuy investors. _ RespOildent accused
Complainant ofbaviDg provided the intonnation for the artlcle to the wan Street loumal.
On October 7,2004, Complainant was terminamd for ~ e use oftbe finD's email."
Complainant alleges lbat his temri~tion from the Respoildeol's employ is an additional
violation under Section 806 of the S~xI.ey Act of 2002.
On Novembef 1. 2004, Respondent sent OSHA a second position starement re.1ative to
Complaioant' 8 termination on October 7, 2004, in which Respondent asserted that Complainant
had been discharged for accessing the ~ ofhis SUperiors,without autb~on. This
rationale for ComplaiDant's discharge appears to be pn#xtnal,liowever, because despite having
dischaIgcd ComphUnaot -fw abuse of the firm's email system. whidlcan be eoostmed as
misconduct. Respondent recorded on CoinpIainant's U-S Conn that the reason far the separatioo
was "u!'Jblal. .S"~!tecpoDdeatalso statedin its ~ that Complainant did DOt engage in
protected activit.yimtil after lie was issued a: final wrltten warning. However; Complainant
"began engaaJng in proiectcd activity in fall of 2003,- when he was heading Respondent' 8 email
data review in reaponse to the SBC's investigation and bad informed Respondent's chief
litigator,_ _ .J that he bad discovered an email incriirrinating Rosponde.ot in the
marlcat timing BCaudals UDder invOitigatioo..
_~. even though Respondent recorded on Compl~s u-s form tbat the reason far his
tenuinatiOD from the Respondent's emplOy was "'mutual. ooosent," RespoildcDllnformcd Ii
subsequCot prospective employer of CompIaioant dJat Complainant had been diBcbaIgcd for
~ email8 without authorization and not bocauso of mubllI1 COoseol, As a resuJt.
Complainant was not offeted the position that he sought with.dIe prospective employee. OsHA
is dissatisfied with RespondcDt's respoDse xegarding this matter. i.e.. that '"misinformation" bad
~ given to the prospective employer tbrough an administrative error.
In
_ sum, based on the foregoing facts, OSHA has reasonable cause to believe that Complainant
engaged in activities that are protected under Section 806 ofthe Sarbanes-Oxley, that
; Respondent was aware of those protected actiVities. lhat Respondent t.oak adverse sedOIlS against
Complainant, and that ComplaiDantts protected activities contn"buted to the adveISC actioils taken
against him. .
Pursuant to 29 CP.R 1980.104, your client is permitted ten (10) businc8s-days from IeCeipt of
t1rls notice widUn which to P!'esent rebuttal evideocc. Your cllimt'B failure to JeSpOod within this
period win result in the issuance of the Assistant Secretary's FiDdings and Preliminary Order
providing relief. including itnJncoAiatc reinstatement of Mr. Sivere. If your clieDt cannot present
the rebuUal evidence within ten business days. we may aaange a mutually acceptable ~ bl,lt
we most be contacted witbinthe ten-day_per1od.
Your client is also iJivited-to an informal resolution of this complaint. and is encouraged to _
-sedODSly consic1er Ibis altemative. Any offer which Respondeirt may desire to propose will be
referred to Complajnant. If you have any questions. please cOntact me at the telephone uumber or
address listed above.
-Sincerely,
-l
l ~
ce. ~:~_:_:-PeterZ. SJvere (Certifie(l"~ #100322600005 9738 6109, RRR)
-_. U.S. Department of Laboi, Offict oftbc SoJicitnr
-_U.s. ~ d Labor, Office of lnYestlgative Assistance
Inve$tiplOrC ~ --
OSHA~":-
~GIW
I
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I
ORRICK
o ORRICK, HERRINGTON & SUT(UH[ Hp
666 fiFTH AVENU[
.. [W YORK,"V 10103·0001
rei 117·')0(,.')000
. flU( 212·5065151
WWW.ORRlCK.COM
Jill L. R05enberll
(212) 506-5215
jrose@orrick.com
May 27, 2005
BvHAND
---'
Supervisory Investigatur
U.S. Department of Labor - OSHA
Manhattan Area Office
201 Varick Street - Room 908
New York, New York 10014
Re: Peter Z. Sivere v. JPMorgan Cha'5c
Case No. 2-4173-04-036
,
Dear'
We represent Respundent JPMorgall Chase & Cu. ("JPM"or "the Company") ill the above
referenced matter. We submit this letter pursuant to 29 C.F.R. Section J980.1 04(e) in response to
OSHA's letter daled May 4, 2005 1 in which OSHA finds "that there is reasonable cause to
believe" that JPM has violated Section 806 of the Sarbanes-Oxley Act ("SOX") Dlp1ahuUii pwviiled.totl)eSEChad
previously' beetiprovided;ij,th~ . SEC by .JPM. or its·· attQrneys. fi'om DPW;.: Complainant was
not and is not a "whistleblower" as he so boldly claiins. Complainwlt had nothing new to
give the SEC because, unknown to Complainant, JPM had fully complied with its obligations
to the SEC. Complainant had sirT;ply assumed that lPM had not complied with its obligation,
atotally unfounded assumption on his part.l'he:SEch~~ad~ JPM thaiCJ11Ptain nt. a
,=='~r~:I~=.I~~~~~~~·
=~d~~~a:I~~~II~~:,~I~o~~~~~146~~:~··'··OSHA
ALLEGATION (p.3):
"Complainant_alleges that on _Of about lune 24, 2004, he was interviewed hy Respondent's
investigator, L .-"'
who purporte'L to be investigating bis allegations against
Respondent. Complainant alleges that f asked him whether he had proof that the
. Respondent had not subnlitted all relevant documents to the SEC. According to Complainant, he
DOQ;NYI:i 12~24fU
--------------
Peter Si vere
., ~ r, ,
__ S-L l"-Pt. 4(:>
_)U I Last
')?l\O c A - _J
New York, NY 10022
PhoneJFax 21247.1.4610
Q5ivere(a]apl·Gm]l
,
January 29, 2007
Occupational Safety and Health Administration
20] Varrick Street, Room 670
New York, NY 10014
Attn: FOIA Officer
(Vial Fax - 212.337.2371 - 5 Pages including cover)
Re: JPMorgan ChaseJSi\'ere 2-4173-Q4-036
Dear FOIA Officer,
The above case is closed; however, I am requesting to review any and all records that are
not exempt from disclosure under the Act. It my understanding, that the OSHA level has
no bearing On appropnate, post-investigative, non-public disclosure of information
between the parties. In this regard, I wish to examine any and all records allowable under
the Act.
Sincerely,
Peter Z. Sivere
cc: " Supervisory Investigator, Region II, WhistlebloW'cr Statutes
'~ck, Herringtoil & Sutcliffe LLP --
Attachments
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
In the Matter of:
File No. OIG-501
OIG-'-501
WITNESS: Number 3
PAGES: 1 through 28
PLACE: Securities and Exchange Commission
100 F Street, N.E., Room 2465
Washington, D.C.
DATE: Friday, November 14, 2008
The above-entitled matter carne on for hearing, pursuant
to notice, at 10:02 a.m .
.,~
biversified Reporting ServiceS,Inc.
(202) 467-9200
Page 2
1 APPEARANCES: 1 Q And you have signed it; is that correct?
2 2 A Yes.
3 On_behal f of the Securi!ies and Exchange Commission: 3 Q Do you have any questions regarding the Notice of
4 _ ~ Special Agent 4 Rights?
5 Securities and Exchange Commission 5 A No.
6 Office of Inspector General 6 Q Okay. I also wanted to let you know that your
7 100 F Street, NE 7 responses and statements given today are provided after you
8 Washington, DC 20549 8 have sworn an oath and they will be taken down verbatim by
9 (202) 551-4524 9 the court reporter.
10 10 This is an official United States government law
11 On behalf of the Witness: 11 enforcement investigation. /The claims asserted in this case
12 -:=. .J
Pro Se (via telephone) 12 are serious ones so it's very important that you tell me
13 13 everything you know about the matter at hand and are
14 14 completely forthcoming and truthful with me.
15 15 Do you understand that?
16 16 A I do.
17 17 . Q Okay.. I'm just going to ask you a couple quick
18 18 background questions. First of all, where do you currently
19· 19 work?
20 20 A I work for the United States Securities and
21 21 Exchange Commission in the New York Regional Office.
22 22 Q How long have you been at the SEC?
23 23 A I've been at the SEC since August of 1996,.
24 24 Q So you beat me by one year. What is your current
25 25 title?
Page 3 Page
1 PROCEEDINGS
1 A
-
I'm an assistant regional director in the Division
2 r- On the record now at 10:02 am. It's
2 of Enforcement.
3
-
Friday, November the 14th. Can you please raise your right 3 Q How long have you had that title?
4 hand? 4 A Since 2005. I can't remember; April or May of
5 Whereupon, 5 2005.
6
6 Q And you are a licensed attorney?
7 waS called as -;~itness, and having ~previously duly
7 A lam.
8 sworn, was examined and testified as follows:
8 Q What states are licensed?
9 EXAMINAnON 9 A I am licensed in New York, California, and
10 BY MR. MORRIS: 10 . Washington, D.C. In California and Washington, D.C. my
11 Q Could you please state and spell your full name for 11 status is inactive:_
'12, the record? 12 Q Okay. Briefly what are your work duties as the
13 A 13 assistant regional director?
14 14 A I supervise and manage investigations of possible
15 Q . my name is Sam Morris. I'm an 15 violations ofthe federal securities laws. I directly
16
-
investigator here at the Office of Inspector General' in 16 supervise two branch chiefs. Each of them have a number of
17 Washington, D.C. We are conducting this testimony over the 17 staff attorneys who they supervise, and together they are
18 phone and this is in regards to an investigation that the 18 investigating various matters that could give rise to
19';·· Office of Inspector General is conducting of allegations of 19 possible enforcement recommendations, and I supervise and
'~,
20 unauthorized disclosure. 20 manage all ofthat
21 Before we went on the record, I had e-mailed you a 21 Q Okay. Who were your branch chiefs back in 2005?
22 copy of our ~otice of Rights, and the court reporter has just 22 A In 2005 upon my appointment, one branch; Branch 10
23 marked that as Exhibit IG Number 2. I just want to verify 23 was vacant The branch chief either had left or the branch
24 that you have read the Notice of Rights; is that correct?
24 was newly created. I can't recall. And the other branch,
- -
25 A Yes.
25 Branch 6, the chiefwas _ ~. In the summer of2005 I
2 (Pages 2 to 5)
Page 6 Page '8 w
t
1 selected a branch chief for Branch 10, and that is' - 1 A That's correct. So those few weeks between his I
2 She is still the chief in Branch 10. ~ ~ 2 departure and my selection ofl _: Sorry, this is
3 Q And is thaI 3 coming back to me as we speak.
'---- ~
4 A Correct. 4 Q That's fine. Do you recall who the staff attorneys
5 Q Who was in, if you recall, in' '-.
- -
.---Jbranch 5 that were assigned to the market timing JP Morgan Chase ~
i
6 back in 2005? 6 investigation? _ ~
7 A You mean before I appointed her? 7 A The only one of whom I aware of is
-
8 Q Yes. 8 There may have been others, and I know of others who worked
9 A Well, I think it's a little more complicated if[ 9 on the matter who were not staffattomeys.
10 can explain. 10 Q What were their positions?
I
11
12
Q Sure
O'
A In 2 O 4 and ~005
r
~
there was reorgan,'zatl'on of the
_
11
12 the A yasa trial counsel. He in the position
assistant regional director in early 2005 also became :~"~ ',~"
13 office, shortly after jecame the assistant 13 that I now have. And a few weeks after his appointment he .?
14 regional director. As I recall it, some branches were 14 resigned to go into private practice and then I became I
15 created and other branches were moved from one assistant 15 appointed. But I understand that he worked a bit on the I
&
16 director group to another, and I Cl!ll't recall exactly what 16 lP Morgan investigation. ~
17 was happening in Branch 10. 17 Q Was there anyone else that worked on it tliat you I
18 Q Okay. 18 can recall? I
19 A Another thing that happened is some individual 19 A _ I
_~ and I believe that's because prior to
~
~
20 staff attorneys were moved from one branch to another. 20 the reorganiZation, this matter, and •_ J
and perhaps ~
21 ,Q SO the bottom line is you cali'trecall exactly who 21 Branch 10 were under her supervision until the I
22 was in Branch 10? 22 reorganization. i
I
23
24
A [remember that -- that's correct. I don't
remember whether Branch 10 was newly created or whether it
23
24
Q So was she an assistant regional director as well?
A Yes. ,
Q S_o_th_e_st_a_ff_a_tt_o_r_n_ey_,_f_r_o_m_w_b_a_t_y_o_u_'_re_sa_y_i_n_g_,_ _--tS
i
t-2_5_ _h_ad_a_p_r_io_r_c_h_i_e_f._I_d_o_r_e_m_e_m_b_e_r_th_at_o_n_e_o_f_t_h_e_fi_0_Tm_e_r +-2_5 __
Page 7 Page 9 I
1 branches for at least some'ofthe people was I -- _ 1 seems like it was just
-- j; is that correct? I
2 Q Okay. Back in or around the 2004/2005 time frame 2 A That's all that I am aware of. I
3 did you or staff ever have an investigation involving 3 Q Okay, and as enforcement goes usually the staff I
4 JP Morgan Chase and market timing? 4 attorney is the one who does most of the investigative work;
I
~
5 A I did not. 5 correct?
6 Q Okay. 6 A Yes, sometimes there may be inv,estigators assigned
~
7 A That investigation is now in Branch 10 and it's 7 and sometimes there may be accountants assigned. I don't know
8 slated to be closed so it is now my responsibility, but I did 8 whether that happened here. ~
9 not have anything to do with it 9 Q Okay, so you don't know if there was an accountant
10 Q Okay. 10 signed?
11 A When it was an active matter. 11 A No.
12 Q Who was in charge of it when it was an active 12 Q I understand that you were not involved in the
13 matter if you know? 13 JP Morgan Chase timing case.
14 A ~ I 14 A It was a market timing investigation as I
15
- 15 understand and, correct, when I became an assistant regional
Q Okay.
16 A AsI thought this through, I believe he was the 16 director it was already slated to be closed and I believe the
17 , chief of Branch 10 before my appointment, but he left. In 17 closing recommendation had been drafted.
18 filct; now I'in sure of it He left shortly after I became an 18 Q Okay, so basically there was really no work for you
19 assistant director. 19 do other than make sure that the closing memo was submitted;
20 Q Okay, so then you would have been- 20 correct?
21 A Iwas his supervisor in the last few weeks of his 21 A Right, although it hasn't been.
22 tenure. 22 Q It still has not been? '
23 Q - okay, so when he vacated the branch chiefspot 23 A No.
24 you would have heen the supervisor because there was no ' 24 Q What is the reason it hasn't been closed?
25 branch chief; correct? • 25 A We have not closed many market ti~
3 (Pages 6 to 9)
Page 10 Page 12
..
1 investigations because in some of them where administrative 1
ihas told me about that. _
2 proceedings were commenced there are issues about how much of 2
Q Okay, and what did Jtell you?
3 the record of all of the market timing investigations must be 3
A ~told me that he did speak to Mr. Sivere and
4 produced. And until those matters are all resolved we are 4
told him that he was not eligible for a bounty.
-
5 keeping the market timing investigations open. So it's a _ 5
/Q When IOU say: _';you're talking about
6 discovery issue. 6
correct?
7 Q I understand. Are you aware if, during the course 7
A That's correct.
8 of this JP Morgan Chase market timing investigation, that an 8
Q AnlY ,told him he wasn't eligible for a
- -
9 employee of JP Morgan contacted the SEC with information that 9
bounty. What was tbe reason for that?
10 might have been helpful to the SEC's investigation? 10
A Well, I believe our bounty program
11 A I have learned that subsequently. I did not know 11
involves - flfSt of all it has to be providing of
12 about it at the time. 12
inforrmilion that is insider trading irivestigation. That's my
13 Q Who was that? 13
recollection, although I haven't looked at the statute in
14 A I believe you're referring to Mr. Sivere, Peter 14
awhile. And there are other requirements I can't remember.
15 Sivere. 15
It has to lead to an enforcement action in which a
16 Q Right. How did you learn that Mr. Sivere had 16
penalty is imposed on the defendant, so the information has
17 contacted the SEC? 17
to relate to insider trading and it h~ to lead to an order
18 : A I don't remember whether I learned it from 18
to pay a penalty as I recall. And neither of those factors
19 , lor whether. I learned it from Mr. Sivere or 19
was present here and I believe that's why _ ~told him
20 somehow oth-;;'rwise learned it, but I certainly learned it from 20
he was ineligible.
21 the two of them. 21
Q Okay. And did you, again I understand that you
22 Q Okay. Do you recall when that contact happened 22
were not involved in this investigation, but did you learn
23 with Mr. Sivere? 23
from any additional information that Mr. Sivere was
24
-
24 A When he provided the staff with the information in playing the role of a whistleblower at JP Morgan?
25 the investigation? 25
A Well, I don't know that I ever learned that he was
Page 11
Page 13
1 Q Yes.
1
playing that role. I learned that he submitted a
2 A I don't recall that because I wasn't involved then,
2
whistleblower complaint to the Department of Labor.
3 but I understand from my later inquiries that this happened
3
Q And you learned tbat from f--- ~
_.
, 4 some time in 2004 approximately. I'm not certain of whether 4
A I believe so. I hesitate because I've learned a
5 it was then or earlier, but I think it was in 2004. 5
lot from Mr. Sivere in many e-mails that Mr. Sivere either
6 Q Do you know if Mr. Sivere 6
sent to me or copied me on. So the exact sources ofsome of
7 Do you recall what Mr. Sivere - what information 7
my infomi.ation is unclear in my mind of whether it was
8 he had to give to the SEC? 8
_;or Mr. Sivere or both. So that's the reason I am
9 A - I don't remember that. I believe he provided the 9
uncertain.
10 staff with some documents.
10
Q Okay. Let me give you a little bit of background
11 Q So~e e-mails, does that ring a bell?
11
witb regards to the information that I have, and certainly
12 A It does. That's my understanding.
12
correct me or iftbat is Dot tbe case, of what you've heard
13 Q Did you ever come to learn that Mr. Sivere had
13
about this particular matter.
14 requested a bounty for providing these JP Morgan e-mails?
14
What I understand is Mr. Sivere had contacted
.15
16
17
A I did.
Q How did you learn that?
A I learned that from
- 1I1d from e-mails
15
16
17
a bounty
rand at one point did request. ask information about
~cause he was providing e-mails from JP Morgan that
at the time JP Morgan did.not turn over to the SEC. However,
I
~
I~
~ - ~
18 thati__ jprovided to me from Mr. Sivere. I believe
18
subsequently later on JP Morgan did .provide those e-mails.
19 that one of the things about those e-mails is that they were
19
Are you aware of that?
20 from an account, I believe at AOL, that had bountyman in the
20
A I ':las not aware of it at.the time, but I have
21 name of the e-mail address of the sender.
21
subsequently learned all of that, yes.
22 Q Do you know iF"' Jver had any conversations
22
Q So that would be accurate, is that correct, from
23 with Mr. Sivere about whether or not he could, in fact, claim
23
what you've learned?
~
24 a bounty?
24
A Based on what -=~as told me that is what I
25 A I do not have personal knowledge of that, but'
25
learned.
4 (Pages 10 to 13)
Page 14 Page
1 Q OkJIy. And did there come a point in time where 1 did you take to inquire about it?
2 JP Morgan Chase had filed a response to the Department of 2 A I asked people who were involved whether they had
3 Labor stating that Mr. Sivere had demanded a cash bounly from 3 any recollection of this disclosure of the information about
4 the SEC? 4 the request for the bounty, and those people werei
5 A Yes. I don't know about the filing, but I recall 5
6 seeing the brief I believe Mr. Sivere sent the briefto 6 Q Okay. Was _ ~the only one that said he
7 - land me, or maybe he sent it td Jrnd 7 didn't recall if he gave that information out?
8
-- lsent it to me. But I have seen the brief 8 A Well, none of them recalled.
9 Q
-
OkJIy. And did Mr. Sivere contact you and ask you 9 Q None of them recalled.
10 how JP Morgan found out about his bounty request? 10 A The information being disclosed. No one could
11 A I received many e-mails from Mr. Sivere asking that 11 remember the information being released.
12 question. 12 Q So nobody
13 Q OkJIy. Did Mr. Sivere tell you in one ofthose 13 A They couldn't say it wasn't, but they just didn't
14 multiple e-mails that he did not tell JP Morgan Chase that 14 remember.
15 information? 15 Q - they didn't remember or not if they had, in
16 A . I can't recall whether he said that. It certainly 16 fact; released it or not released the information?
~
17 seemed to me that he believed someone on the staff had 17 A Nor were they aware of anyone else releasing it. ~,
~
18 ~
disclosed the information so by implication he was saying it 18 Q Okay. So if Sivere was telling you in his e-mails ~.~
19 wasn't him. But I don't remember that he explicidy said it 19 that someone, that basically you surmise that someone from J
~
20 wasn't him but he might have. 20 the SEC staff had leaked that information about him telling
21 Q Now I understand there was another preliminary 21 about him asking for a bounty, did you find that to be
22 investigation done by the IG's office back in October of 2005 22 credible at the time?
23 in which you spoke to a
- _ Does that ring a 23 A I don't know what I thought at the time that I .
24 bell? 24 first learned it about its credibility, but when I saw the
25 A I spoke to her at least once, maybe more than once. 25 brief I thought there were only two possibilities. One is
Page 15 Page 17 ;
1 Q Okay. And during the course of t}lat inquiry did
- - as to how JP Morgan Chase learned
1 that the brief misstates what happened, or that the I
~
2 you question 2 information was disclosed. ·1
3
-' $
about the bounty demand? 3 Q Okay, and if the information was disclosed it would ~.'
4 A I did. Now the only hesitation I have in saying 4 have most likely come from someone at the New York Regional ~
5 yes to your question is whether it was during the course of 5 Office; correct? ~
~
I
6
7
8
the inspector general's inquiry. I know about the inspector
general's inquiry, but I also learned about this issue that
Mr. Sivere was raising with f -"~and I believe that
6
7
8
A Or Mr. Sivere.
Q Or Mr. Sivere. Well, okay, so basically it would
have either come from Mr. Sivere or someone working on the
I
I
--J
9 those two things happened independently. 9 JP Morgan Chase market timing investigation.
10 . In other words, , "'came to me and told me 10 A Correct. But the brief, as I recall, stated that
11 about what Mr. Sivere ~Ieging'~d Complaining about to him 11 the SEC staff had authorized 1P Morgan to state this in the
12 and showed me Some of the e-rtlails he had received. And I 12 brief. That I did not find credible. I don't believe that
13 thought that this was something thatI had to look into to 13 happened_
14 see if I could determine what happened. 14 Q So to me there's two issues. One is, was the
15 I learned at about that time, October or so of 15 information disclosed inadvertently or by accident or
16 2005, that Mr. Slvere had complained to the inspector 16 whatever. And tlle other is, it was the statement I saw in
17 . general's office and that the inspector general was 17 the brief about the SEC authorizing JP Morgan Chase to use
18 conducting an investigation. So those two things in my mind 18 tbat information in the brief.
19 were happening iltthe same time. 19 Those two things in my mind were separate. I
20 Q So basically you took it upon yourself when you . 20 thought it possible that SEC staff had disclosed the
21 learned that there was a possible leak from the SEC staff to 21 information. I tbought it unlikely that authority had been
22 JP Morgan's staff, you took it upon yourself to investigate 22 given to JP Morgan Chase to use that Infonnation.
23 that further? 23 Q I mean that's something that tbe SEC wouldn't do is
24 A I inquired aboUt it further, yes. 24 give authority to release that type of infonnatioR; correct?
25 Q Well, inquired about it further. And'what steps 25 A Right. I mean, we don't do that. ~pens is
5 (Pages 14 to 17)
Page 18 Page 20
1 in the course of investigations, non-public information is 1 and' ~ \ is my peer and not a subordinate of mine.
2 disclosed in accordance with our routine uses. 2 But with!._ ,) the answer to your questions is yes.
3 - Q The 1662. 3 At the time, and I had several reasons for
--.
4 A Right There may be many reasons why staff in a 4 counselin~ in that regard. At the time of these
-
5' particular context might disclose non-pilblic information. 5 'events, which are now four or more years ago, in2004 before
6 When we do, we're doing it for when at least the staff 6 my tenure, ~e was a relatively new staff attorney. So I
7 perceives to be a legitimate investigative purpose or for any 7 thought it was possible that a novice staff attorney might
8 of the other reasons permitted by the routine uses. 8 have disclosed some information inadvertently that should not
9 But we then lose control of what happens to the . 9 have been disclosed.
- -
10 information. The people, when they hear it, then they use it 10 I did not reach a conclusion tha~ _ , d i d
11 for their own purposes. But we wouldn't say, now that we've 11 disclose the information. But I thought he might have, and
12 told you this you can go out and do what you want with it or 12 so for that reason I counseled him about the importance of
13 you can use the information in a brief. 13 maintaining, not the confidentiality, but not disclosing, the
14 That would not be normal or customary. And I don't 14 importance of not disclosing non-public information unless
15 think it happened here. 15 warranted by a routine use.
16 Q And giving information over, non-public 16 Q And what was his response to your counseling him on
17 information, I understand that does happen in enforcement all 17 that?
18 the time for certain purposes. But to tell, you know, 18 A He was very open to it and understood what I was
19 someone at JP Morgan or outside counsel that Mr. Sivere had 19 saying and, you know, again repeated that he didn't remember
20 requested a bounty, to me tbat would serve no purpose to 20 in this instance disclosing this information,.although he
21 further the investigation.. Do you agree witb that? 21 said he might have.
22 A I have a hard time conceiving of a legitimate 22 Q Okay, so he said he may have done it but he
23 investigative purpose for it, but I was not involved in the 23 couldn't recall.
24 investigation and I wasn't making the decisions at the time. 24 A He did not remember doing it, but he was candid
.2 5 So I don't know whether the staff members who were 25 enough to admit that he might have. I regarded that as
Page 19 Page 21
1 involved in the investigation if they disclosed this 1 speculation on his part about what he might have done because
2 information themselves thought that they were doing so in 2 he didn't remember it and that is what I concluded that I
3 good faith with a legitimate business purpose. I can't 3 didn't know who disclosed it, but
jmight have and so
4 answer that one way or the other. 4 that prompted me to counsel him.
5 Q Okay, but if you were in charge 5 Q Okay. And subsequently to counseling him and the
6 A It's hard for me to imagine it, but it may be that 6 preliminary inquiry that the IG conducted back in 2005, has
7 they had a good reason. 7 this particular topic come up again in regards to Mr. Sivere
8 Q - okay, but you can't imagine. But if you were 8 and the bounty disclosure, possible bounty disclosure?
9 the direct supervisor you would certainly, tbat's something 9 A Well, I think I did the counseling in late 2005 and
10 that you wouldn't do, wouldn't au.thorize to be done to give 10 thereafter I received many e-mails from Mr. Sivere and I
11 out that information about Mr. Sh'ere asking for a bounty? 11 conferred with the office of the generafcounsel, and I
12 A Absent a legitimate investigative purpose, correct 12 believe with your office about these many e-mails that I was
13 Q 13
14 said you spoke to
,- ---
When you conducted your inquiry did you, and yon
-----,
• and I believe it 14
receiving in 2006.
I believeC ]was continuing to receive them
15 was- 15 as well as others inside the commission. And I sought the
16
.--
A -=------. ._--- 16 advice of a legal cOWlSei about how or whether to respond,
17 Q _ _ ~ right, and they all said they didn't 17 and after receiying that advice I did respond once.
18 recall disclosing that information one way or the other nor 18 Q What was the response?
19 did they know if anyone else at the SEC disclosed the 19 A I don't remember, but it was short and itwas in
20 information; is that correct? 20 accordance with the advice I had received from the general
21 A That's C()rrect 21 cOWlSel.
22 Q Did you take it a. step further after that? In. - .'. 22 Q What was the advice you had received?
." . . .
23 other words, did.you talk to them or counselth.eni about' 23 A About what to say to him.
24 disclosingnon;-pubUc information? . 24 Q Do you recall in some substance what it was?
25 A Not ~em. T\Vo of Utem had already left the'staff 25 A I don't remember what I wrote.
6 (Pages 18 to 21)
Page 22 Page 24
1 Q Do you recall what the advice was? 1 A I do.
2 A The advice, I remember, the advice was over what to 2 Q I ask that you provide that to me and just provide
f 3 say to him and I followed that advice. I just don't remember 3 me with a copy of that.
4 what I said. 4 A Since this is a confidential personnel matter I
5 Q Okay. And after that point did you stop 5 don't know whether I can.
6 communicating with Mr. Sivere? 6 Q Yes, you can.
7 A I never communicated with him at all except for 7 A All right.
8 that one time. 8 Q I wouldn't ask for it if you couldn't.
9 Q Except for t~t one ti~e. okay. Did he continue to 9 A Okay.
10 communicate with· 10 Q And I think that will help with what, if you
11 A I believe so. I don't know whether I was copied on 11 understand, will help with this investigation. Have you had
12 all of the e-mails that' - 1was receiving, but I believe 12 any other issues withf ~since you counseled him? Has
13 he continued to write to l 13 he ever approached you again or has he ever approached you
14 Q And at some point in time did that s~? 14 with any other questions along the lines of disclosing
15 A I believe it did. Mine stopped. I think\ 15 non-public information?
16 stopped. I ~topped h.:aring about it so I believe he stopped
- 16 A No.
17 writing to( 17 Q Okay. Have you had any other issues with(
-
18 Q So as the assistant regional director and as the 18 that relate to his work product or anything like that?
19 supervisor as:
- ~
"1 at the time, you felt that you took 19 A Do I have to answer that question?
20 all the steps necessary, you conducted an inquiry to find out 20 Q Well, you do, and the only reason I'm asking it is
21 if there was a possible leak, you interviewed those people 21 because of this investigation and you don't have to be
22 remaining on the staff; correct? 22 specific. Let me ask it a different way.
/'
23 A And people who had left the staff. land 23 A Okay, go ahead.
24 - 1had left the staff. 24 Q Let me a~k it a different way. Do you feel
25 Q And you still had 25 confident that understands, as you sit here today
Page 23 Page 25
1 A When I interviewed them. 1 or sit in your home today, that he understands what
2 Q - you did talk to them after they left? 2 information may and may not be shared with outside counselor
3 A Yes. 3 defense counselor a broker~dealer,anything along those
4 Q So you basically took all the steps necessary to 4 lines?
5 find out whether or not information might have been leaked to 5 A Absolutely. I have no reason to think he doesn't
6 JP Morgan Chase; is that correct? 6 understand the requirements of our job with respect to
7 A I believe I did and I can't recall for certain, but .7 non-public information.
8 I may have sought counsel from the office of human resources 8 Q Okay,.I think that's an easier question for yo.u to
9
10
- how to handle this situation before
about
....J
-,
I counseled 9
10
answer.
A Yes.
11 Q Okay. Do you recall if the office of human 11 Q All right. So is there anything else that I haven't
12 resources told you, you know, just counselL . ~on that? 12 asked you that you would like to state for the record.that
13 A I don't remember where that idea originated, 13 would be helpful in concluding this IG investigation?
14 whether it was with me or OHR or with my supervisor, but that 14 A I think we've covered everything. 1 believe that
15 was the conclusion I reached which was that that was an 15 this was an important matter that came to my attentio~. I .
16 appropriate way of handling the situation in light of all the 16 believe that I handled it in a way that as proportionate to
17 , information that I had at hand. 17 what had happened. I saw no reason to think that the
18 Q Did you take any notes of your counseling? 18 disclosure of the information about the request for a bounty
19 A No, but I subsequently wrote a memorandum to my 19 in any way compromised the staff investigation of the matter.
20 file. 20 So while I thought the possible disclosure was
21 Q Did you provide a memorandum were you ever 21 serious I wanted to respond to it in a way that was
22 requested to provide a memorandum to the IG's office? 22 appropriate and proportionate and I think the steps rtook to
23 A No, not that I recall. 23 counser _were both appropriate and proportionate.
24 QDo you stili have a copy of the memorandum you 24 Q Okay. Again, I appreciate your time today in
25 made? • 25 talking with me. I don't have any furthe~~ionsat this
7 (Pages 22 to 25)
Page 26
1 time. There may come a point where I may have to talk to you
2. again. But I just want to reiterate for the record that I
3 will hopefully be receiving a ~opy of your internal
4 memorandum of counseling __
5 A Okay.
6 Q And with that said, I appreciate it, and we are off
7 the record at 10:40 a.m. Thankyou very much.
8 (Whereupon, at 10:40 a.m., the interview was
9 concluded.)
10 * ........
11
12
13
14
15
16
17
18,
19
20
21
22
23
24
25
Page 27
1 PROOFREADER'S CERT1FlCATE
2
3 In the Matter of OlG-50 I
4 Witness:
5 File Number: OlG-50 I
6 Date: Friday, November 14,2008
7 .Location: Washington, D.C.
B,
9
10 This is to certifY that I; Carol Ready (the
11 undersigned), do hereby swear and affinn that the attached
12 pro~~s before the U.S. Securities and Exchange'
13 Commission' ~ere held accOrding to the record and that this is
14 the original, c6~plete, true and accurate trans~pt that has
15 been compared to thefelll;lrting or recording accomplished at
16 the hearing.
17
IB
19
20
21 (Proofreaders.Name) (Date)
22
23
24
25 .
11 t'A.A III JJts IJlU us SEClffiITIES & COMM ~OOl
UNITED STATES
SECURn-IES AND EXCHANGE COMMISSION
New York Regional Office
Three Wortd Financial Center
Suite 400
New York, NY 10281-1022'
CONFIDENTIALITY NOTE
THIS FACSIMILE MAY CONTAIN INFORMATIOIol THAi IS PRlVJLEGED, CO"lFIDENTlAL OR OTHERWISE PROTECTED FROM DISCLOSURE IT
IS INTENDED FOR THE USE OF mE INDMDUAl OR ENTITY NAMED. IF iHE READER OF THIS MESSAGE IS NOT THE INiENDED
RECIPIENT, OR mE EMPLOYEE OR AGEHT RESPO~SleLE TO DELNER IT TO TIiE INTENDED RECIPIENT, YOU SHOULD Be AWAAE ntAT
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COMMUNICATION IN ERROR, PLEASE IMMEDIATElY NOTIFY US BY TELEPHONE, AND RETURN THE ORIGiNAl MESSt\GE TO US AT THE
ABOVE ADDRESS BY ~L 'lliANK YOU.
FROM:
.--.J
.,
ASSISTANT REGIONAL DIRECTOR
DIVISION OF ENFORCEMENT
Telephone Number: C'. . l
Telecopier Number: (212) 336-1320
PLEASE DELIVER THE FOLLOWING PAGES,TO:
1/
Name:
Company or Finn: Inspector General's Office
Date: November 17,2008
,
Telephone Number:
Telecopier Number. 202-772-9265
Total Number of Pages, Including Cover Sheet: 3
Commen1s:
If you do not receive aD the pages, please telephone for assistance
us SEClmITIES & COMM IlJ002
UNITED STATES
SECUIUTIES AND EXCHANGE COMMISSION
INTBROFFICE MEMORANDUM
====-======================00= = = = = = =
TO: File
FROM: .J
c. Regional DirectorIT
Assistant
~)L
RE: Complaint by Peter Sivere
DATE: December 27, 2005
This matter arose in connection with an enforcement investigation, In the Matter of
Certain Mutual Fund Trading Practices (NY-7220). In October 2005, the staff received an e-mail
from Peter Sivere in which he inquired about an apparent disclosure of non-public information
and requested an investigation by the Inspector General. The non-public infonnation was that
Mr. Sivere had sought payment from the SEC for providing the SEC with documents in 2004.
This memor.mdum summarizes my review oftbis matter. In connection with this review, I
spoke with the staff attorney handling the investigation, r 1Assistant Regional
!?,irector,' . J former ~ssistant ~egional.Direct?r, L - J, and fonn Branch.Chief,
i_ . _ _ I also conferredWlth Assoclate RegIonal Drrector, -land WIth the
Inspector General's Office.
Background. In June 2004 Mr. Sivere supplied some e-mails to the staff and requested a
''bounty'' for doing 50 _ _ .~. Jecalls that he told Mr. Sivere that he was not eligible for a
bounty for providing the e-mails to the staff.
In August 2004 Mr. Sivere told the staffby email that he had filed a complaint with the
Department of Labor following procedures ofthe Sarbanes-Oxley Act. In October 2004 Mr.
Sivere told the staffin an email that he had been fired.by his employer. JP Morgan. In October
2005, Mr. Sivere told the staff in an email that, in a position statement JP Morgan submitted in
connection with the Department of Labor proceeding, JP Morgan stated that Mr. Sivere had
sought payment from SEC for providing the staff with documents.
Review.-=-.- ~ecall~ that the staffmet with representatives of JP Morgan in
connection with the investigation. :Jh~d a vague!,ecolJection of such a meeting as well
but she did not remember what was discussed.. }laid that during this meeting, OT
perhaps on another occasion, someone from the staff, maybe him, might have said that Mr.
Sivere had sought payment from the.§EC fore!0viding m:t:~nnatiJn from th~ staff, but he did not
have a specific recollection of this. )andi lid not recall any
. such disclosure. .-J --.-J --..
- - - - - - - - - - - - - - - - - - _.. _ - - - - --
11/17/2008 17:59 FAX 212 336 1320 US SECURITIES & COMM ~003
I Conclusion. Itappears that someone on the staff disclosed to .TP Morgan that Mr. Sivere
had sought paym~t from the SEC for providing the e-mails.This was non-public information
whose disclosure does not appear warranted by any investigative purpose. It also appears that
=- -: might have made the disclosure, although this is not certain.
_ SupervisOlyAction. I hav~ discussed this matter withL . ....:.-. and explained that the
information that Mr. Sivere had sought payment from the SEC was non-public information that
should not have been disclosed. I explained that information obtained in the course of an
investigation is non-public. Pursuant to Rule 2 of the Commission's Rules Relating to
Investigations, non-public information obtained in the course of an investigation should not be
disclosed unless made a matter of public record in an enforcement proceeding. Such information
may be used by the Commission only if the USe is a routine use listed in the Commission's·
Supplemental Information Form 1662. I told) inot to furnish non-public information
to others during an investigation unless doing so is a permissible routine use.
Discussion with Inspector General's Office. I reported the facts as set forth above to the
Inspector General's Office staff, who had already heard from Mr. Sivere. I explained what steps
I had taken to review the matter, including the sllp~rvisory action I had taken.. In light ofthis, I
understand that the Inspector General's Office will take no further action in connection with this
matter.
Attachments: Pertinent e-mails between Mr. Sivere and f
2
MEMORANDUM
TO: H. David Kotz
:speClor Genera~ \ ;jI(;f/1
FROM:
Investigator J1
SUBJECT: OIG-501
DATE: November 2, 2008
The OIG interviewed by telephoneL _ . Jartner, at
Orrick, Herrington & Sutcliffe ("Orrick"). Orrick represented JPMorgan In a lawsuit
regarding the termination of Peter Sivere ("Sivere") from JPMorgan in 2005.
Sivere claimed that someone at the Securities and Exchange Commission ("SEC")
told JPMorgan that Sivere had asked the SEC for money for the emails.
~informed the OIG that she learned that someone from the SEC had in
fact disclosed information regarding Sivere's request for a bounty. I~ .1stated that
this information was given to the Department of Labor in response to Sivere's lawsuit
filed with the DOL under the Sarbanes-Oxley Act. ~ -'stated she received this
information from a third party which represented JPMorgan.
In late November 2008, after numerous conversatioqs, c- "\ finally agreed to
provide the OIG with contact information for~ ;, Partner, atDavis Polk &
Wardwell ("Davis PolJ{'). Davis P
investigation into JPMorgan's market timing in 2004-5.
MEMORANDUM
TO: H. David Kotz
Inspector General
FROM:
Investigator
SUBJECT:. 0 I G-50 1
DATE: Decemb~r 1,2008
The OIG interviewed by phone, '___ -e-JPartner, at Davis
Polk & Wardwell ("Davis Polk"). Davis Polk represented lPMorgan regarding the
Securities and Exchange Commission's ("SEC") investigation into lPMorgan's market
timing in 2004-5.
During the SEC's investigation, Peter Sivere ("Sivere") claimed that someone at
the SEC informed lPMorgan or its outside counsel that Sivere had asked the SEC for
money for emails that Sivere provided to the SEC.
- . r
-.-informed the OIG, that(_ '. Ahad in fact confirmed
that Sivere had requested a bounty from the SEC. _ lparticTpated in a phone call with
the SEC in early May 2005, during that phone call,_ _J confirmed that Sivere did in
fact ask for a bounty from the SEC.
__ ' 1 '.. ",
Addit~onalJ.y, _ _jstated thati_ ..._, gave his firm, Davis Polk, permission and
encouraged . ito use that information in a lawsuit between lPMorgan and Sivere.
Further, =- --=:jstated thatthe information regarding Sivere's bounty request was given to
the Department of Labor ("DOL") in response to Sivere's lawsuit filed with the DOL
under the Sarbanes-OxIey Act.