Securities Cases


$8 Million Each for Two SEC Whistleblowers, SEC Hits $1 Billion Thanks to Tipsters

$8 Million Each for Two SEC Whistleblowers, SEC Hits $1 Billion Thanks to Tipsters

The SEC does the best job of any government agency when it comes to ensuring whistleblower identities remain confidential. The recent awards are not the exception. All we know is that five different individuals submitted information to the SEC exposing misconduct by a company in the securities industry.

After careful consideration, the SEC established that only two of the whistleblowers had provided original information, which made them eligible for an award. 

The two anonymous whistleblowers offered critical evidence that enabled the SEC to bring an enforcement action, including substantial monetary sanctions, against the unidentified wrongdoer. Enforcement actions of this type have now surpassed the $1 billion threshold in terms of financial remedies collected from fraudsters.

According to the SEC order that concluded the recent case, the first whistleblower alerted the agency about the misconduct, while whistleblower No 2 provided additional information that helped SEC staff bring the relevant enforcement action.

Both whistleblowers collaborated closely with the SEC to ensure the wrongdoers could be held accountable....


Government Employee Receives $2.5 Million Whistleblower Award from SEC

Government Employee Receives $2.5 Million Whistleblower Award from SEC

The SEC recently announced it has awarded $2.5 million to a whistleblower who is also a government employee. This is the first time the SEC has publicized giving an award to an employee of a government agency.

As it is customary with the SEC, the identity of the whistleblower remains anonymous, and specific details about the wrongdoing have not been revealed. The novelty here is the fact that a government employee has been considered eligible for an award.

On paper, government agency employees can receive whistleblower awards as long as they are not employees of a law enforcement organization, the SEC itself, or a number of regulatory agencies, which include the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation.

Although we have very little information about who the whistleblower is, the SEC revealed that he or she worked for a government agency that has a law enforcement component, but not in that specific section....


Top 10 FCPA Enforcement Actions in 2016: Record Year Fuels FCPA Whistleblower Opportunity

Top 10 FCPA Enforcement Actions in 2016: Record Year Fuels FCPA Whistleblower Opportunity

Last year set new records for Foreign Corrupt Practices Act (FCPA) enforcement, with 27 companies paying over $2.48 billion in FCPA settlements. In 2016, the Department of Justice (DOJ) reached four of the largest FCPA settlements in history: Teva Pharmaceuticals Industries ($519 million), Odebrecht and Braskem ($419.8 million), Och-Ziff Capital Management Group ($412 million) and VimpelCom Limited ($397.6 million).
These precedent-setting resolutions speak volumes regarding the...

Lincoln Financial Pays $650K for FINRA Cybersecurity Violations

Lincoln Financial Pays $650K for FINRA Cybersecurity Violations

Lincoln Financial Group subsidiary, Indiana-based Lincoln Financial Securities Corp., has agreed to pay a $650,000 Financial Industry Regulatory Authority (FINRA) fine and tighten up its cybersecurity practices after hackers obtained sensitive information on 5,400 customers, FINRA reported Monday.

Breach Follows Recent FINRA Reprimand

This isn’t the first time Lincoln Financial Securities has been in trouble for less-than-adequate cybersecurity. In February 2011, FINRA fined the company $450,000 for insufficient cybersecurity on its electronic portfolio management system, according to the Law360 report. After the company’s 2011 penalty, it amended cybersecurity policies to offer guidance for representatives of cloud-based data storage. Unfortunately, this was insufficient to prevent another breach....


SECs Record-Setting Enforcement Actions Credited to Securities Fraud Whistleblowers

SECs Record-Setting Enforcement Actions Credited to Securities Fraud Whistleblowers

The Securities and Exchange Commission’s (SEC) record-breaking enforcement numbers reported for fiscal year 2016 highlight the importance of securities fraud whistleblowers in combatting misconduct and illegal activity.

The agency played hardball against securities fraud this year, implementing innovative data and analytics techniques to detect suspicious activity and investigate investment advisors, accountants, companies and their C-Suite leaders.

Whistleblowers across the globe aided in uncovering misconduct and contributed heavily to the overall success of the SEC’s fight against fraud....


SEC Pays $3.75M Whistleblower Award to Australian BHP Billiton Employee

SEC Pays $3.75M Whistleblower Award to Australian BHP Billiton Employee

You don't have to be a U.S. citizen to get a whistleblower award. The U.S. Securities and Exchange Commission (SEC) has paid an Australian and former BHP Billiton employee a $3.75 million whistleblower award for reporting the company’s violations of the Foreign Corrupt Practices Act at the Beijing Olympics, the Sydney Morning Herald announced Monday.

First Time SEC Pays Whistleblower Award to Australian Employee

The BHP Billiton case marks the first time the SEC has paid a whistleblower award to an employee of an Australian company. Under the Sarbanes-Oxley Act, the SEC offers whistleblowers cash awards for tips leading to successful government recovery. The Australian government does not offer whistleblower rewards or protections to its citizens, and the case is causing regions of Australia to evaluate the possibility of implementing its own whistleblower laws....


SEC Pays Second Largest Whistleblower Award: $17 Million

The Securities and Exchange Commission (SEC) has announced its second largest whistleblower award yet - $17 million - to be paid to an anonymous individual who supplied information that led to a successful agency investigation and financial recovery on securities fraud damages.

Whistleblower Tip Could Lead to $170M SEC Recovery

The SEC whistleblower program does not release details of its cases, investigations or underlying enforcement actions, though given the $17 million award amount, the total amount recovered by the SEC could fall in the range of $56.7 million to $170 million. A fund has been established by Congress to pay the whistleblower awards, financed with monies obtained from successful enforcement actions....


One Week - Two Multi-Million Dollar SEC Whistleblower Awards

One Week - Two Multi-Million Dollar SEC Whistleblower Awards

The website of the Securities and Exchange Commission's whistleblower program is rather welcoming. Its introductory text explains that, “whistleblowers can help the Commission identify possible fraud and other violations” allowing it to “minimize the harm to investors, better preserve the integrity of the United States' capital markets, and more swiftly hold accountable those responsible for unlawful conduct.”

The SEC has been faithful to its practice of keeping cases and whistleblower identities private ever since the Office of the Whistleblower was first established. Partly because of this, SEC whistleblower awards have always been extremely newsworthy, especially when the whistleblower's name somehow made its way into a journalist's desktop.

But if the SEC’s whistleblower awards have appeared to be a rarity so far, that seems to be about to change.

Securities Exchange Commission Whistleblower Program Gaining Momentum

In terms of scope, rewards, and recoveries, the program has been gaining momentum, and it has just hit an important benchmark. SEC has just awarded over $5 million to one whistleblower and $3.5 million to another, all in the span of one week. The $5 million award is the third largest amount the SEC has ever paid a whistleblower....


Key Insights from SEC’s 2015 Whistleblower Report to Congress

Key Insights from SEC’s 2015 Whistleblower Report to Congress

The SEC Office of the Whistleblower (OWB) has released its Fiscal Year 2015 Dodd-Frank Whistleblower Program report to Congress. Dodd-Frank offers substantial monetary awards to individuals with information that leads to successful enforcement actions. This year’s report confirms the program’s continued growth and success. Since its inception in August 2011, tips are up 30% and $54 million has been awarded to whistleblowers for their efforts.
SEC Tips, Claims and Award Payouts...

Private International Wealth Management Scam Victims Recover Money from PIWM Ponzi Con

Private International Wealth Management Scam Victims Recover Money from PIWM Ponzi Con

Dennis Edmonds was a stockbroker in North Carolina; Ellwood Jones, a wealth manager in California; and the firm of Foster & Dunhill peddled so-called “business protection plans” in Florida.

They all had one nefarious thing in common, according to Ohio-based investor-rights attorney John Chapman -- they all put their clients into Nikolai Battoo’s “Private International Wealth Management (PIWM)” portfolios, with the bogus claim that Battoo was a financial genius of epic proportions.

Two Peas in a Pod – PIWM’s Nikolai Battoo and Madoff

The PIWM turned out to be a massive Ponzi scheme connected to the infamous Bernard Madoff.  Investors lost $20 billion in Madoff’s house-of-cards scam....