Report Securities Fraud & Collect 10% to 30% of the Recovery under the SEC's New Whistleblower Program

The Securities and Exchange Commission’s new whistleblower reward program allows those with information concerning corporate fraud the opportunity to report securities fraud, investment fraud, insider trading, stock fraud, and accounting fraud, and collect rewards worth millions of dollars.

Under the Dodd-Frank financial reform law, whistleblowers who provide useful and original information are eligible to receive 10 to 30 percent of penalties of $1 million or more that the SEC collects in criminal or civil cases.

Prior to the enactment of the Dodd-Frank Act, the SEC only had authority to reward whistleblowers in insider trading cases. The SEC's new whistleblower program strengthens the SEC's ability to protect investors in several ways:

Better Tips: Over the past several months, the SEC has seen an increase in the quality of tips that it has been receiving from individuals since Congress created the program.
Timely Tips: Potential whistleblowers are incentivized to report securities fraud sooner rather than later with "timely" information not yet known to the SEC.
Maximizes Outside Resources: With fewer than 4,000 employees to regulate more than 35,000 entities, the SEC cannot be everywhere at all times. With a robust whistleblower program, the SEC is more likely to find and deter wrongdoing at firms it may not have otherwise uncovered.
New Protections Against Retaliation: Employees who report securities fraud are provided with new tools to protect themselves against employers who retaliate.
Bolsters Internal Compliance: The new rules provide significant incentives for employees to report any wrongdoing to their company's internal compliance department before coming to the SEC. Therefore, companies that would prefer their employees report internally first are incentivized to a have credible, effective compliance program in place.

Responsive to whistleblower fears of employer retaliation, the new law does not require the would-be whistleblower to report the fraud to his employer first. Rather, the law allows whistleblowers to file a complaint directly with the SEC.

Recently, the SEC reported that it received 334 whistleblower tips between the time the new program became effective on August 12, 2011 and September 30th. Among those who have filed claims are a former BNY Mellon currency trader and two former State Street currency employees. The allegations against their former employer-banks center on claims that they overpriced certain currency trades for large institutional clients by using less-advantageous exchange rates to maximize their own profits. If these allegations prove successful, these whistleblowers may be the first to receive a bounty under the new SEC program.

While the new program provides excellent opportunities for whistleblowers with original information, navigating the securities laws and dealing with the SEC can be both complex and time-consuming. Hiring attorneys with knowledge and experience is crucial to maximizing your reward.

Latest Securities Fraud News

Johnson & Johnson to Pay $158M to Settle Texas Drug Case

January 19, 2012 - Johnson and Johnson recently settled with the the state of Texas' Medicaid program for $158M after a whistleblower learned that the drug company was making false or misleading statements about the safety, cost and effectiveness of the anti-psychotic medication Risperdal, and improperly influencing officials and doctors to prescribe it. As a result of J&J's fraudulent actions, its stock price was inflated and its shareholders suffered damages. In this settlement, the Government recovered Medicaid funds paid to J&J as a result of its false claims. However, because of the impact J&J's fraudulent actions has on it's stock price, this is also a form of corporate securities fraud.

January 18, 2012 - Two multi-billion dollar hedge fund advisory firms, seven fund managers and analysts have been accused of forming a $78 million insider trading scheme to purchase shares of a major company based upon nonpublic information. If you had uncovered this scheme and reported it by filing an anonymous complaint here, you could have been entitled to a large monetary reward.

January 17, 2012 - Netflix is being sued by its shareholders in a class action complaint claiming that the movie rental company failed to inform them that its content contracts were due to expire and would be too costly to renew. As a result, Netflix raised the cost of membership causing its stock to tank. Meanwhile, the CEO of the company sold 190,000 of his shares for $43.2 million. You can anonymously report this type of securities fraud to the attorneys at Levy Phillips & Konigsberg, LLP, to be entitled to a large monetary reward.

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