The SEC Awards More Than $14 Million to Whistleblower
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) was established in the wake of the financial crisis in July 2010. The Act overhauled financial regulations and introduced additional consumer protections. The Security Exchange Commission’s Office of the Whistleblower (the “Office of the Whistleblower”) was established in 2011 as authorized under the Act. The Office of the Whistleblower encourages persons to blow the whistle when that person knows of a possible securities law violation. The Commission pays whistleblowers awards rangi
ng from 10% to 30% of monies collected when the information provided is deemed high-quality original information that leads to an enforcement action in which over $1 million in sanctions is ordered and collected.
The SEC’s first payment to a whistleblower under the Act was made in August 2012 totaling approximately $50,000. In August and September 2013, more than $25,000 was awarded to three whistleblowers who helped the SEC and the U.S. Department of Justice halt a sham hedge fund. The total payout to whistleblowers in that case once all sanctions are collected is likely to exceed $125,000.
In October 2013 it was announced that an unidentified whistleblower will receive more than $14 million for aiding the SEC. This is a huge leap from the largest payout of $125,000 in an individual whistleblower case. Such a large payout will likely have the desired effect of having more whistleblowers come forward with high-quality original information on possible securities law violations.
SEC Chair Mary Jo White had the following to say about the whistleblower program and the over $14 million payout: “Our whistleblower program already has had a big impact on our investigations by providing us with high quality, meaningful tips . . . . We hope an award like this encourages more individuals with information to come forward.”
Sean McKessy, chief of the Office of the Whistleblower said: “While it is certainly gratifying to make this significant award payout, the even better news for investors is that whistleblowers are coming forward to assist us in stopping potential fraud in its tracks so that no future investors are harmed . . . . That ultimately is what the whistleblower program is all about.”
In addition to the Office of the Whistleblower, many state and city laws are created to encourage whistleblowers to report fraud against the government and to protect the whistleblowers from retaliation.
At Rosenfarb LLC we have a team of accounting experts and attorneys who can assist you in initiating litigation when you become aware of financial fraud against the government. At Rosenfarb we will work closely with you and commit the time and resources necessary to assist you in receiving an award for the risks you take to blow the whistle on financial frauds against the government. We frame the issues simply and in alignment with the litigation strategy. We are sincere, professional and credible. We are accounting experts with legal acumen.
Rosenfarb LLC
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