Tagged Articles

financial fraud 35 articles

SEC Moves To Cap Whistleblower Awards

The Securities and Exchange Commission (SEC) will propose to a rule that would slash awards to whistleblowers in some of the biggest cases of securities-law violations – a move that raises concerns such a rule could weaken incentives for individuals to report fraud and other wrongdoing. Currently, whistleblowers who tip off the SEC to securities violations receive between 10 and 30 percent of the total sanctions levied against the violating firm, as long as the sanctions amount to at least $1 million. The Wall Street Journal notes that the narrow majority of awards doled out under the SEC’s whistleblower program ... Read More

Wells Fargo Blames Hundreds of Home Foreclosures on Calculating Error

Wells Fargo said a software glitch in its mortgage loan modification underwriting tool led to hundreds of its customers losing their houses to foreclosure. In its latest quarterly filing with the U.S. Securities and Exchange Commission (SEC), Wells Fargo said that the calculation error caused about 625 customers to either be incorrectly denied a government-sponsored mortgage loan modification or not offered a loan modification when they would have qualified. “In approximately 400 of these instances, after the loan modification was denied or the customer was deemed ineligible to be offered a loan modification, a foreclosure was completed,” Wells Fargo said ... Read More

Wells Fargo Wasn’t the Only Bank to Open Unauthorized Customer Accounts

Wells Fargo wasn’t an outlier when it opened 3.5 million unauthorized customer accounts. Federal regulators found that dozens of other banks opened nearly 10,000 deposit and loan accounts for customers without their consent. The new banking fraud revelation came in testimony given by U.S. Comptroller of the Currency (OCC) Joseph Otting before the Senate Banking Committee June 14. Although the number of newly discovered fraudulent accounts is miniscule in comparison to the 3.5 million bogus accounts Wells Fargo bankers opened for customers, it points to the need for banks to put better safeguards in place. According to USA Today, banking ... Read More

SEC Whistleblower Gets Agency’s Highest-Ever Award

The Securities and Exchange Commission (SEC) announced Monday that one whistleblower who helped regulators with their investigations of securities violations will receive the agency’s highest-ever award of more than $33 million. In addition to the latest award, which exceeds the previous high of $30 million awarded to a whistleblower in 2014, the SEC said that two additional whistleblowers will share an award of nearly $50 million. “These awards demonstrate that whistleblowers can provide the SEC with incredibly significant information that enables us to pursue and remedy serious violations that might otherwise go unnoticed,” said Jane Norberg, Chief of the SEC’s ... Read More

Record SEC and CFTC Whistleblower Awards Given In JPMorgan Case

Whistleblowers who provided tips to federal regulators about JPMorgan Chase & Co.’s failure to properly inform some wealthy investors about conflicts of interest are set to receive record monetary awards. The whistleblowers helped the Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) put the brakes on JPMorgan’s misconduct, resulting in a record $367 million asset-management agreement. According to Bloomberg, the record JPMorgan settlement included $100 million that went to the CFTC, “described as a $40 million monetary penalty and $60 million in disgorgement.” The bank also agreed to pay the SEC an additional $267 million. ... Read More

SEC Whistleblower Protections Jeopardized By Proposed Bill

Remember the banking industry and Wall Street fraud that brought the United States to the brink of economic collapse? A new bill introduced by Republican Congress members proposes to dismantle the protections put in place in 2010 to ensure that fraud and loose regulations would never again drag us to into another Depression. It’s astonishing that just seven years after the Dodd–Frank Wall Street Reform and Consumer Protection Act was passed, U.S. legislators with strong ties to the financial industry are poised to destroy the regulations that returned a derailed economy to its tracks. Even the Securities and Exchange Commission’s ... Read More

Wells Fargo May Have To Rehire a Second Whistleblower

The Occupational Safety and Health Administration (OSHA) alerted Wells Fargo Bank in December that it was likely to order the bank to reinstate a former bank manager it fired in 2011 after she called the company’s ethics hotlines to report suspected fraud. If reinstated, Claudia Ponce de Leon would be the second Wells Fargo whistleblower that the federal government has told the bank to rehire. Ms. Ponce de Leon was the bank manager of a Wells Fargo unit in Pomona, California, when she suspected bankers under her supervision were opening fake accounts for clients in an effort to meet sales ... Read More

Court’s Ruling in Digital Realty Retaliation Complaint Allows Broader Whistleblower Protections  

A former sales representative for a San Francisco datacenter acquisition company who claims to have been fired for reporting financial wrongdoing internally may still sue the company as a whistleblower even though he did not contact the federal government, the Ninth U.S. Circuit Court of Appeals ruled February 9. The ruling provides further clarity on what whistleblower activity is protected by the Securities and Exchange Commission (SEC) under the Dodd-Frank law. The question of whether a whistleblower who is fired for reporting financial improprieties to his employer but not federal regulators is one that has divided federal courts in the ... Read More

Three Whistleblowers Share $7 Million SEC Award

A group of whistleblowers who provided tips to the Securities and Exchange Commission (SEC) about a fraudulent investment scheme will share an award of more than $7 million, the agency said Monday. According to the SEC, the information provided by the whistleblowers led to a successful enforcement action, but the agency did not say how much the offending company was penalized. The SEC’s policy is to not reveal any information that could directly or indirectly reveal the identity of a whistleblower. The SEC said one whistleblower provided information that served as the primary impetus for its investigation. That whistleblower will ... Read More

BlackRock Pays SEC Penalty For Silencing Whistleblowers With Employee Agreements

Asset management corporation BlackRock Inc. has agreed to pay a $340,000 penalty to settle allegations that it improperly used separation agreements to muzzle exiting employees, forcing them to forfeit their whistleblower rights and protections, the U.S. Securities and Exchange Commission (SEC) said Tuesday. The settlement makes BlackRock the latest in a series of companies that have settled similar allegations with the SEC’s Office of the Whistleblower in recent months, ending the practice of silencing would-be whistleblowers by threatening separation agreement arrangements and severance payments. According to the SEC’s order, more than a thousand departing BlackRock employees signed separation agreements containing ... Read More