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SEC Awards $4.5 Million to Two Securities Industry Whistleblowers

Earlier this year, the Securities and Exchange Commission (SEC) announced two major awards to securities industry whistleblowers. First, a whistleblower who had information of serious securities industry misconduct was awarded $4 million, for offering a detailed and specific tip that led to major enforcement action. Then, soon after, a company insider was awarded more than $500,000 for valuable information that gave the agency the ability to take on well-hidden financial misconduct.

Whistleblowers Have Helped Agency Bring Nearly $1 Billion in Sanctions  

The SEC whistleblower program first went into effect in July of 2010, after President Barack Obama signed the Dodd-Frank Wall Street Reform Act into law. The program was designed to create an incentive for people to come forward and report serious securities law violations. If information provided to the SEC eventually leads to major enforcement action, the whistleblower program allows the agency to award the individual who came forward compensation in an amount that is equal to between 10 and 30 percent of the total value of the enforcement action.

This program is extremely important, as in many cases, insiders and others with advanced industry knowledge are the only parties who truly have enough information to detect and report complex financial fraud schemes. Without information from securities industry whistleblowers, some fraud schemes and financial misconduct would take many more years to be detected, if the bad acts were discovered at all.

Thus far, the whistleblower program has helped to uncover several cases involving securities fraud and other serious financial misconduct. With the two latest whistleblower awards by the agency, the SEC has now taken 44 different successful enforcement actions that each resulted in more than $1 million in penalties being issued. In total, more than $953 million in financial remedies have been brought against bad-acting parties and collectively the whistleblowers have recovered more than $150 million in compensation.

Florida is One of the Top States for SEC Whistleblower Tips  

According to the data collected and published by the SEC, 10,540 securities industry whistleblower tips were sent to the agency between 2011 and 2015. While not all tips are reliable or lead to enforcement action, many of them do. 892 of those whistleblower tips, or 8.5 percent, came from the state of Florida. Not only does this mean that Florida had the third most total SEC whistleblower tips in the country, but the state is significantly over-represented based on its population. This reiterates the important lesson that Florida investors always need to take care to protect themselves from fraud. All investors should be sure to regularly review their account statements and holdings to ensure that they are being treated fairly by brokerage firms and registered investment advisers. 

Were You a Victim Investment Fraud in South Florida? 

We can help. At Carlson & Associates, P.A., we have helped many investors recover full and fair compensation for their losses. If you sustained significant losses, please call us today at 1-(305)-372-9700 to schedule your fully confidential initial legal consultation. From our office in Miami, we serve communities throughout South Florida.

Resources:

sec.gov/news/press-release/2017-84

sec.gov/news/press-release/2017-90

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