JPMorgan faces scrutiny after WSJ says prosecutors reviewed whistleblower claims

JPMorgan Chase & Co (NYSE:JPM) came under renewed scrutiny after The Wall Street Journal reported on Thursday U.S. federal prosecutors reviewed whistleblower allegations claiming the bank mishandled fraud cases and improperly denied customers more than $100 million in reimbursements.

According to WSJ, the review stemmed from a whistleblower complaint filed last year by Christy Lillie, JPMorgan's former head of scam prevention.

Prosecutors from the U.S. Attorney's Office in Manhattan and officials from the Treasury Department reportedly met with Lillie and later received documents supporting her claims.

The report said it was unclear whether the authorities are still investigating the matter, and no wrongdoing has been alleged by prosecutors.

JPMorgan rejected the allegations. "We believe these claims have no merit. We took the concerns seriously, carefully reviewed them, and found no evidence of wrongdoing or violations of law," a JPMorgan spokesperson told WSJ.

The whistleblower alleged the bank classified certain customer losses as scams rather than fraud, allowing it to deny reimbursement claims.

The report said the complaint also claimed JPMorgan internally estimated that changing its reimbursement policies could cost at least $100 million.

The report added that Lillie separately accused JPMorgan of failing to identify thousands of suspicious accounts that should have been flagged under anti-money laundering rules.

JPMorgan said it found no evidence supporting those allegations and maintained that its reimbursement standards met or exceeded legal requirements.