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Articles Posted in Whistleblower award

us-dollars-money-300x300Trevor Murray, an ex-UBS AG analyst, is asking a New York federal judge to award him $3.2 in attorneys’ fees from a lawsuit he filed against his former employer. Murray is claiming that federal securities law requires the bank to allocate the funds to him.

Murray was victorious in his almost seven-year fight with the bank after he was allegedly fired in 2012 for his complaints. He was allegedly complaining that he was being pressured to falsify a report to better market conditions to boost UBS’ revenue numbers, in order to attract more investors. Both of the law firms that represented him in that case have asked for fees for their work.

Murray has stated that, since he’s won a jury verdict in this case, the Sarbanes-Oxley Act provides that his legal bills.

CFTC-to-Issue-Whistleblower-Award-of-Approximately-290000-1024x711-300x208The Securities and Exchange Commission (SEC) announced on September 24, 2018 that it has awarded nearly $4 million to an overseas whistleblower.

The overseas whistleblower provided a tip that led the SEC to open an investigation. Further, the overseas whistleblower’s assistance helped the SEC bring a successful enforcement action.

This is one of the few instances in which the SEC issued a whistleblower award to an overseas whistleblower. The award indicates that any individual, overseas or in the United States of America, that voluntarily provides the SEC with original, relevant information is eligible to participate in the whistleblower process, be afforded the protections of the process, and obtain a whistleblower award.

What’s-In-a-Name-Whistleblowers-300x300The U.S. Commodity Futures Trading Commission announced that it has awarded more than $45 million to whistleblowers. This includes a recent $30 million award to a whistleblower, the largest single award in the program. A second whistleblower award of $70,000 is the first to be awarded to a resident of a foreign country. Both individuals provided critical information that led to successful outcomes.

The program encourages individuals to report misconduct and violations of the Commodities Exchange Act (CEA.) Whistleblowers are offered protection against retaliation for reporting, and these awards are given for successful recovery.

According to the CFTC’s website, the Whistleblower Program “was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).  The CFTC pays monetary awards to eligible whistleblowers that voluntarily provide the CFTC with original information on violations of the CEA that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.”

The Securities and Exchange Commission (the “SEC”) announced on March 19, 2018 its largest whistleblower award: a $50 million bounty split between two whistleblowers and a $33 million award to a third whistleblower.

Prior to the combined $83 million award, the SEC’s highest whistleblower award was $30 million awarded in 2014.

In 2010, Congress added Section 21F to the Securities Exchange Act of 1934 (the “Exchange Act”). Part of 21F authorized the SEC to pay monetary awards to individuals who voluntarily provided the SEC with original information about a securities law violation that lead to the SEC sanctioning the wrongdoer in excess of $1 million.

An overseas tipster recently helped the SEC take down a large and long-running securities fraud at the whistleblowers former company.

As per policy, the SEC would not identify the individual whistleblower or the specific securities violation they helped to uncover, but they did note the tipster worked for the company where the alleged securities violations took place and they offered to assist the SEC throughout its entire investigation. The SEC also said that the tipster was not a U.S. citizen and worked for the company in an overseas office.

Jane Norberg, chief of the SEC’s Office  spoke about the case saying “Company insiders often have valuable information that can help the SEC halt an ongoing securities law violation and better protect investors,” She also spoke about the SEC whistleblower program in general “The breadth of the SEC’s whistleblower program is demonstrated by this case, where the whistleblower, a foreign national working outside of the United States, affirmatively stepped forward to shine a light on the wrongdoing.”

On November 30, 2017, the Securities and Exchange Commission announced two whistleblower awards in excess of $8 million.  The bounties were awarded to 2 individual whistleblowers whose information was instrumental in the SEC investigations, and who’s continuing assistance and cooperation substantially assisted the SEC in successfully bringing the underlying enforcement actions.

SEC enforcement actions sourcing from whistleblower tips have resulted in more than $1 billion in financial remedies ordered against securities and investment firms since 2012.

One of the whistleblowers in the recent awards alerted the SEC enforcement staff of misconduct that would become the central focus of the staff’s investigation and the centerpiece of the SEC’s subsequent enforcement action.  The second whistleblower at the same firm provided additional significant information and ongoing cooperation to the staff during the investigation resulting in a substantial savings of time and agency resources.  

The Whistleblower business can be very profitable for tipsters, a landmark whistleblower award of nearly $2.5 million was awarded today by the Securities and Exchange Commission. The recipient of this award was the employee of a domestic government agency. Information provided by this whistleblower was instrumental in launching a SEC investigation. The anonymous whistleblower continued to offer assistance and eventually helped expose wide ranging misconduct in an unnamed company.

Jane Norberg, the Chief of the SEC’s Office of the Whistleblower praised whistleblowers and the continued success of the award program.

”Whistleblowers can provide a wealth of information and ongoing assistance that helps our agency bring enforcement actions quicker and more efficiently,” She also noted the speed allowed by the assistance of whistleblowers.’ “This whistleblower not only helped us open the case, but also provided timely ongoing assistance along with critical documents and testimony that accelerated the pace of our enforcement action.”

Even with political clouds of uncertainty from the Trump administration, the head of U.S Securities and Exchange Commission is moving the agency full speed ahead, all the while chastising companies that retaliate or discourage their employees from blowing the whistle on possible securities violations.

Last month, Jane Norberg; the current chief of the SEC’s Office of the Whistleblower spoke on a panel at the Practising Law Institute on Corporate Whistleblowing. During the panel, she told attendees that they could expect the same level of enforcement and investigation as in years past.

Open for business

The CFTC Whistleblower program today announced the launch of a news portal, event schedule, and FAQ for its whistleblower program on its website

This new portal will contain industry news, CFTC Events and a FAQ covering the Whistleblower program and information on submitting a whistleblower tip and claiming awards based on accurate tips. The CFTC hopes this newly created section of its site will provide higher quality tips that lead to larger sanctions and more awards being paid out to tipsters.

Some of the tips for Whistleblowers suggested by the CFTC

New York Attorney General Eric Schneiderman announced a whistleblower-initiated $40 million settlement with Alabama-based investment firm Harbert Management Corp. over unpaid state income taxes claimed instead in lower-tax Alabama.

The dispute arose out of 2015 whistleblower allegations that members of Harbert failed to pay millions of dollars in taxes.  New York law requires businesses that operate both in and out of New York to apportion taxes on income derived in New York.

The settlement alleges that Harbinger Partners Offshore Managers LLC, a $26 billion New York City hedge fund sponsored by Harbert, failed to pay certain required taxes in New York from 2004 through 2009.  Instead, Harbinger paid taxes in Alabama, where rates were much lower.

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