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SEC Whistleblower Lawyer Blog

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The SEC announced an award of over $7 million split among three (3) whistleblower who helped the SEC litigate an investment scheme.

The SEC began their investigation when one of the whistleblowers provided a tip to the SEC.  The initial whistleblower will receive more than $4 million for his initial information, per the SEC.  During the SEC’s investigation, the two other whistleblowers together provided new information that significantly contributed to the SEC’s successful enforcement action.  The two other whistleblowers will split more than $3 million for the information they provided to the SEC.

According to the SEC, the tips provided by various whistleblowers have resulted in almost $1 billion in financial remedies, a great amount given that the program was established less than five years ago.

How the Investment Management Firm BlackRock Undermined Whistleblower Incentives on secwhistleblowerlawyers.net

Firm managing $5.1 trillion is forced to change improper employee whistleblower policy

Until recently, the world’s largest investment management firm forced ex-employees to sign away their rights to potential whistleblower awards in order to receive employee separation package payments. BlackRock, Inc., which has 30 offices in 70 countries, was charged by the SEC and fined $340,000 for the illegal policy, which is alleged to have affected more than 1,000 employees.

BlackRock’s controversial policy, which the SEC alleged was retaliation for a new rule improving whistleblower awards, isn’t the only example of a financial firm attempting to discourage current or former employees from blowing the whistle.

The Securities and Exchange Commission (the “SEC”) announced an award of more than $5.5 million to a whistleblower who provided pertinent information that helped the SEC uncover an ongoing scheme on January 6, 2017.

According to the SEC’s order, the whistleblower was employed at the company involved in the wrongdoing.  The whistleblower proceeded to report the information directly to the SEC, which brought a successful enforcement action to end the scheme.

Enforcement actions from whistleblower tips have resulted in more than $904 million in financial remedies according to the SEC’s whistleblower main page.  The SEC whistleblower has awarded approximately $142 million to 38 whistleblowers since issuing its first award in 2012.

Proposed CFTC Rules Might Make It Easier for Whistleblowers to Inform the Government About Commodities Fraud on secwhistleblowerlawyers.net

The regulatory agency has requested public comment on proposed amendments

The Commodity Futures Trading Commission (CFTC), the independent US government agency that regulates futures and options markets, has requested public comment on proposed amendments to their rules regarding whistleblowers. Specifically, the changes are intended to streamline the process for whistleblowers and to help ensure that they receive protection from potential retaliation.

How does the CFTC currently deal with whistleblowers?

The Securities and Exchange Commission (the “SEC’) announced on December 9, 2016 that it had awarded more than $900,000 to a whistleblower whose tip enabled the SEC to bring multiple enforcement actions against bad actors.

The nearly-$1 million award is the second award announced by the SEC this week and brings the total amount awarded to whistleblowers to more than $136 million.  The $136 million plus has been awarded to 37 whistleblowers.

Under the SEC whistleblower program, established by the Dodd-Frank Act in 2011, the SEC is required to ardently protect confidentiality of whistleblowers and cannot disclose information that might indirectly or directly reveal a whistleblower’s identity.

The Securities and Exchange Commission (the “SEC’) announced on December 5, 2016 that it had awarded a whistleblower approximately $3.5 million for coming forward with information that led to an SEC enforcement action.

The $3.5 million whistleblower award brings the total amount awarded to whistleblowers to $135 million to 36 whistleblowers.  In addition to the amount awarded to whistleblower, the SEC has collected over $874 million in financial remedies through enforcement actions brought about by whistleblower tips.

Under the SEC whistleblower program, established by the Dodd-Frank Act in 2011, the SEC is required to ardently protect confidentiality of whistleblowers and cannot disclose information that might indirectly or directly reveal a whistleblower’s identity.

The sound of a whistle on Wall Street blew loudly this week for one informative whistleblower.  What did that whistle sound like? It sounded like $20 million.

On November 14, 2016, the Securities and Exchange Commission (“SEC”) announced an award of more than $20 million to a whistleblower who gave valuable information that enabled the SEC to initiate an enforcement action against wrongdoers before the wrongdoers squandered the money.  The $20 million award is the third-highest since the SEC’s whistleblower program issued its first award in 2012.

Under the SEC whistleblower rules, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.  This is why the details in almost all news releases regarding a whistleblower award are sparse.  Even the SEC order determining the whistleblower claim is largely redacted.  Other whistleblower orders follow suit.

On September 29, 2016, the Securities and Exchange Commission (the “SEC”) announced that casino-gaming company International Game Technology (“IGT”) agreed to pay a $500,000 penalty for firing an employee who reported to senior management and the SEC that the company’s financial statements might be distorted.

The whistleblower retaliation case is the second of its kind since the Dodd-Frank Act authorized the agency to bring retaliation charges.  According to the SEC order, the employee had been a director of an IGT division since 2008 and received positive performance reviews throughout his time with the company and never received any sort of discipline or corrective action.

The whistleblower received a favorable evaluation in the 2014 mid-year review and was deemed an employee on the rise, according to the order.  Shortly after that review, the whistleblower raised concerns to his managers, to the company’s internal complaint hotline, and to the SEC that IGT’s publicly-reported financial statements may have been misstated.  Approximately three months after the whistleblower raised his concerns, according to the order, IGT terminated him.

The Securities and Exchange Commission announced on September 28, 2016 that Anheuser-Busch InBev agreed to pay $6 million to settle charges that the company violated the Foreign Corrupt Practices Act (FCPA) and attempted to silence a whistleblower who reported the misconduct.

An SEC investigation found that the company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production the company’s products in India.  According to the SEC order, Anheuser-Busch InBev repeatedly ignored employee complaints, had inadequate internal accounting controls to detect and prevent the improper payments, and failed to ensure that transactions involving the promoters were recorded properly in its books and records.

Additionally, according to the order, the SEC found that Anheuser-Busch InBev entered into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about the potential FCPA violations due to a substantial financial penalty that would be imposed for violating strict non-disclosure terms.

The Securities and Exchange Commission announced on September 20, 2016 an award of over $4 million to a whistleblower.  The whistleblower’s original information alerted the SEC to a fraud.

The SEC whistleblower program was established by Congress in 2011 to incentivize whistleblowers with specific, timely and credible information about federal securities laws violations to report to the SEC.  Since its inception, the SEC whistleblower program has awarded more than $111 million to 34 whistleblowers.

The SEC lays out the process for a whistleblower.  First, a whistleblower submits a tip to the SEC.  The SEC will then analyze and investigate the tip.  A case will be filed if the tip is fruitful to the SEC and penalties will be ordered.  Notices of the covered actions will then be posted, and the whistleblower will file a claim.  Once the SEC determines the award, between 10 and 30 percent of what the SEC collected when monetary sanctions exceed $1 million, a payout will be made to the whistleblower from the Investor Protection Fund.

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