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Securities and Exchange Commission 33 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

SEC Awards Overseas Whistleblower $4 Million

The U.S. Securities and Exchange Commission (SEC) said it has paid nearly $4 million to an overseas whistleblower whose “extensive assistance” helped regulators take a successful enforcement action against the offending company. “Whistleblowers, whether they are located in the U.S. or abroad, provide a valuable service to investors and help us stop wrongdoing,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower, in a Sept. 24 announcement. “This award recognizes the continued, important assistance provided by the whistleblower throughout the course of the investigation.” September has been an active month for the SEC’s Whistleblower program, which has been ... Read More

SEC Awards 3 Whistleblowers $55.5 Million in Two Separate Cases

The U.S. Securities and Exchange Commission’s (SEC) Whistleblower Office recently announced it has paid out more than $55.5 million to three whistleblowers who assisted regulators in stopping violations, fraud, and other misconduct harming investors. On Sept. 6, the SEC said that it had awarded two whistleblowers who assisted regulators in the same case. One whistleblower will receive a $39 million award – the agency’s second-largest payout to date – and the other will receive a $15 million award for providing “critical information and continued assistance” that helped the SEC crack down on the offending company. On Sept. 14, the SEC ... Read More

SEC Proposes Changes to its Whistleblower Program

The Securities and Exchange Commission (SEC) has proposed a series of changes to its whistleblower program that the agency says will boost the efficiency and overall performance of its informant-driven enforcement actions. The SEC added the proposed amendments to the whistleblower program to the Federal Register July 20. The changes would provide the SEC with additional tools to ensure that whistleblowers are appropriately rewarded for their efforts, the agency said. The SEC also proposed ways to increase efficiency in the whistleblower claims review process and to clarify the requirements for whistleblower anti-retaliation protections. The SEC’s whistleblower program was established by ... Read More

Fyre Festival Founder Settles SEC Fraud Allegations

One of the founders of the disastrous Fyre Festival, which left scores of guests who paid thousands of dollars to attend the much-touted luxury event stranded on a Bahamian island in tents, has agreed to a $27.4 million settlement resolving various fraud allegations with the Securities and Exchange Commission (SEC). According to the SEC, William Z. (Billy) McFarland, two companies he founded, a former senior executive, and a former contractor fraudulently induced more than 100 investors to entrust them with at least $27.4 million to fund a luxurious “once-in-a-lifetime” music event in the Bahamas. Mr. McFarland inflated key operational and ... 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

SEC Sues Two NY Securities Brokers For Defrauding Customers

The Securities and Exchange Commission (SEC) said it charged two New York-based brokers with making unsuitable trades that were costly for customers but highly profitable for the brokers. In a Dec. 6 announcement, the SEC said it filed a complaint in Manhattan federal court against Zachary S. Berkey of Centerreach, New York, and Daniel T. Fischer of Greenwich, Connecticut, alleging the brokers “conducted in-and-out trading that was almost certain to lose money for customers while yielding commissions for themselves. “ According to the SEC’s complaint, 10 customers of Four Points Capital Partners LLC, where Mr. Berkey and Mr. Fischer previously worked, lost a ... Read More

SEC Awards Whistleblower $4.1 Million For Insider Tips

The Securities and Exchange Commission (SEC) on Dec. 5 announced a whistleblower award of more than $4.1 million to a former company insider who alerted the agency to a “widespread, multi-year securities law violation.” The SEC said that after initially contacting the agency about the alleged violations, the whistleblower continued to provide important information and assistance to the SEC throughout its investigation. The whistleblower was the third awarded by the SEC in less than a week’s time. Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said that whistleblowers are instrumental in helping federal regulators finding and investigating violations of securities ... 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

Whistleblower Retaliation Suits Claim SunEdison Falsified Financial Standing

Solar power company SunEdison Inc. faces whistleblower lawsuits filed by two former executives who claim they were fired in retaliation for voicing their concerns about the company’s precarious financial state. According to the Wall Street Journal, Carlos Domenech, formerly a senior executive at TerraForm Power, a SunEdison subsidiary, and Pancho Perez, a former senior exec at TerraForm Global Inc., seek an unspecified amount of back pay and damages for being fired, they claim, in retaliation for sounding an alarm about misrepresentations the company was making about its financial health. Both plaintiffs also name a number of top officials as defendants ... Read More