If you knew your boss was engaging in illegal activities, you would want protection from retribution to report the wrongdoing. So too, do those on Wall St.
What Qualifies as a Security and Exchange Commission (SEC) Whistleblower?
The Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law in 2010 by President Obama is the most far-reaching piece of financial legislation passed since the Great Depression. The drafters of this legislations realizing that actual change to financial practices must come from within wrote whistleblower incentives into the legislation and those incentives became law with the bill’s enactment. Since its inception, several awards have been made to whistleblowers, the largest in September 2014 was for $30 million and just as many have been denied. Therefore, it would be wise to “know before your whistle blow”. The following are instances that have been judged as violations or covered actions:
- Fraudulent hedge funds
- Money laundering
- Securities fraud
- “Security-based swap agreements”
- Insider trading
- Market manipulation
- Retaliatory behavior
According to the Commissioner of the Dodd-Frank Whistleblower Program, Sean McKessy, “The Commission has paid more than $54 million to 22 whistleblowers since the Commission’s new whistleblower rules went into effect in August 2011.” Awards may be 10-30 percent of the sanctions enforced of more than $1 million. None of the award or incentive money ever comes from investors.
The purpose of the Whistleblower Program is to provide an atmosphere of transparency for investors and investment advisors. Although there has been some criticism of a program that provides rewards or incentives for whistleblowers, there have also been many compliments. The main goal of the program is to provide measures to protect investors and bring out into the open previous practices that robbed unwary investors and the American taxpayer.
Many believe that the longer the program is in effect and the more incentives are paid to informants for their tips, referrals, and complaints, the greater number of knowledgeable people will step forward and report improper deals, policies, and practices that do harm or have the potential to do harm to investors.
What to Do When You Suspect Wrongdoing or Misconduct
When you have information that you believe could be a violation the Consumer Protections Act, let a skilled evaluator investigate the merits of your information before divulging publicly any information you may hold. Whistleblowers are safeguarded against retaliation and lawyer/client confidentiality applies. You may remain anonymous and there is no requirement to name names during the initial consult. Case evaluations and initial consultations are free and without further obligation from the Labaton Sucharow SEC Whistleblower attorneys. To request an evaluation of your case contact us.