Frank Bisignano, head of the Internal Revenue Service and Social Security Administration, faces allegations he spied on colleagues while co-chief operating officer at JPMorgan Chase over a decade ago.

People familiar with the matter say Bisignano directed security staff to use software to snoop in emails of rival executives—including Charlie Scharf, then head of consumer banking and now Wells Fargo CEO—and accessed a confidential Federal Energy Regulatory Commission draft complaint about a derivatives trade. He also surveilled employees' keystrokes to track draft materials.

The alleged goal was to undermine rivals and tighten control as he expanded responsibilities. No customer data misuse is alleged. By late 2012, CEO Jamie Dimon lost trust after years of complaints about disrespectful conduct and broken data norms, telling Bisignano he would support him finding a job elsewhere.