In a recent press release, the SEC announced the award of $12 million to two whistleblowers who assisted in an enforcement action against a registered broker-dealer involved in wrongdoing.
The first whistleblower received a $9 million bounty after providing a tip that led to the SEC’s investigation. Without this information, the activity at the firm would have been “difficult to detect.” This whistleblower continued to provide information and assistance during the investigation. This included the identification of witnesses and “helping staff understand complex fact patterns and issues related to the matters under investigation.”
The first whistleblower suffered hardships while trying to remedy the issues at hand. The SEC used this whistleblower’s information to build its investigative plan and draft initial document requests. The firm in question was ultimately ordered to pay an undisclosed amount in disgorgement of prejudgment interest and a civil money penalty.
The second whistleblower received the remaining $3 million bounty after providing additional information for the investigation. The Claims Review Staff (CRS) decided to lower the award amount to this whistleblower considering the lateness of the tip submission. However, this whistleblower also provided additional assistance to SEC staff, including “factual details beyond what Claimant 1 had been able to provide.” This whistleblower also provided “a more complete picture” of the activity at the firm. The SEC used this information during settlement negotiations with the firm’s legal counsel.
However, the SEC found that the second whistleblower had waited long after leaving the employment of the broker-dealer before contacting them to submit information. Therefore, the broker-dealer continued to defraud investors for some time while the investors were unaware of the deception until the activity ceased.
Three additional claimants were denied awards by the CRS.
This investigation also led to another related enforcement action but did not yield more than $1 million in monetary sanctions. Therefore, there were no additional bounties awarded.
Retaining Experienced SEC Whistleblower Attorneys
Whistleblowers help everyone by notifying the SEC of conduct that harms the investing public, while also earning financial compensation for themselves. Hiring experienced SEC counsel may greatly increase the probability that the SEC initiates an investigation based on your information. If you wish to remain anonymous, you must be represented by an attorney, who will submit everything on your behalf.
Silver Law and the Law Firm of David R. Chase jointly have experienced SEC whistleblower lawyers, including a former SEC Enforcement attorney on the team, so you will always have guidance throughout the process. Our SEC whistleblower attorneys can help you if you have information regarding securities or investment fraud, violations of federal securities laws, false filings, market manipulation, or other misconduct. You must provide timely, credible, and original information or analysis to be eligible.
Contact us through our online form or at (800) 975-4345 for a consultation. Our attorneys work on a contingency fee basis. This means that it costs you nothing to hire us, and we collect our fees only if you receive an SEC bounty. Because we get paid when you do, we have the incentive to help you collect the maximum award available.