SEC Whistleblower Lawyer Blog

Insiders in the investment advice sector are starting to grow bolder and start a trend of notifying the SEC of bad-acting firms and principals.

On August 30, 2016, the Securities and Exchange Commission announced another whistleblower award in the amount of more than $22 million.  The amount is the second-largest total the SEC has awarded a whistleblower.  The whistleblower’s detailed tip and extensive assistance helped the SEC halt a “well-hidden” fraud at the company where the whistleblower worked, according to the SEC.

Earlier this month, Indiana announced its first whistleblower award, giving $95,000 to a former JP Morgan official who helped the state’s regulator make an advice-related case against the firm that resulted in a $950,000 settlement.

Litigating a case can take a long time and accrues many costs and fees.  Among those fees include filing costs, the cost of hiring an expert to testify, the cost of various office tasks such as printing and mailing, and many others.  But the first cost that immediately comes to most people’s minds is attorney’s fees.

Often times, the costs of paying an attorney might dissuade people from getting one in the first place or bowing to financial pressure in the midst of case simply because the client does not have enough money to continue paying an attorney.  Paying thousands of dollars to an attorney without having absolute certainty a client will win his or her case can be a daunting endeavor.

The contingency fee presents a solution to all those upfront costs.

California-based Health Net Inc. has agreed to pay a penalty for illegally using its severance agreements to require outgoing employees to waive their ability to obtain monetary awards from the Securities and Exchange Commission (the “SEC”) whistleblower program.

Health Net has agreed to pay a $340,000 penalty per the SEC’s order.

According to the SEC’s order, Health Net included a provision that enumerating various potential claims against it that a departing employee waived as a condition of being paid monetary severance payments – essentially an agreement stipulating to keep quiet or risk losing your money.

Second Circuit of Appeals reverses lower court’s dismissal

The Second Circuit of Appeals contributed to the ongoing battle over the definition of a whistleblower September 10 by remanding a workplace retaliation case dismissed by a lower court in 2014.

Daniel Berman reported an alleged violation within his corporation before reporting it to the SEC, allegedly resulting in his termination, according to Law 360. Berman, a former financial director at Neo@Oglivy, sued the marketing firm and its parent company, WPP Group USA, Inc., in January 2014.

Represents the second award to be issued by the CFTC

The U.S. Commodity Future Trading Commission (CFTC) is seeking important information on infringements against the Commodity Exchange Act (CEA). In a recent announcement, the commission reported that it intended to award a credible whistleblower up to $290,000.

The CFTC’s Whistleblower Program provides monetary awards to persons who report violations of the CEA if the information leads to an enforcement action that results in more than $1 million in monetary sanctions. In addition, whistleblowers are eligible for 10 to 30 percent of monies collected.