It was an active year for fraud enforcement at the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC). Though by no means was it a record year for either regulator in terms of big-ticket wins. Aside from the CFTC's $1.7 billion recovery from South African crypto company Mirror Trading for foul play with foreign currency transactions, the balance of the Top-10 recoveries was...
2023 was another big year for whistleblowers, helping the government recover billions of dollars in dozens of fraud enforcement actions. As usual, virtually all these whistleblower-prompted recoveries were under the government's three primary whistleblower rewards programs -- the False Claims Act, the SEC Whistleblower Program, and the CFTC Whistleblower Program. Successful whistleblowers under each of these...
The Foreign Corrupt Practices Act (FCPA) bars payments to foreign officials for any kind of business advantage, such as securing government contracts or other kinds of favorable business treatment. The statute covers any form of consideration including gifts, meals, travel, and entertainment. It also imposes strict record-keeping and internal control requirements to prevent falsifying company books and records...
SEC Goes After JP Morgan for Violating Whistleblower Protection Rule
Posted 01/18/24
Add JP Morgan Securities to the ever-expanding list of companies the Securities and Exchange Commission (SEC) has gone after for violating the agency's Whistleblower Protection Rule -- SEC Rule 21F-17(a). This rule broadly prohibits companies from taking any action to impede or discourage whistleblowers from reporting suspected securities violations to the SEC. Yesterday (January 16), the SEC announced the JP...
Top Ten SEC and CFTC Whistleblower Awards for 2023
Posted 01/16/24
It was a relatively quiet year for the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in their payout of whistleblower awards under their respective whistleblower programs. Under the SEC Program and CFTC Program -- both enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act -- whistleblowers who provide information that leads to a successful government...
This week's Department of Justice (DOJ) Catch of the Week goes to SAP SE (SAP). On Wednesday (January 10), the German-based software company agreed to pay roughly $220 million to settle DOJ and SEC charges of violating the Foreign Corrupt Practices Act (FCPA) through bribes to government officials in South Africa and Indonesia.
The FCPA bars payments to foreign officials for any kind of business advantage, such...
Better Markets Heralds SEC Whistleblower Program as a Model To Follow
Posted 12/14/23
Better Markets-- a nonpartisan nonprofit promoting the public interest in financial reform and the economy -- just released (on December 7) a report on the SEC Whistleblower Program, touting it as a $6 billion success story. In announcing its findings, Better Markets did not spare its high praise for the whistleblower program, highlighting "just how critical [it] has been as a law enforcement tool, allowing the SEC...
This week's Department of Justice (DOJ) Catch of the Week goes to King Kong Tools GmbH & Co KG. On Wednesday (November 29), the German-based supplier of recycling, forestry, construction, and agricultural equipment, along with its American subsidiary, agreed to pay $1.9 million to settle DOJ charges of violating the False Claims Act through customs fraud. More specifically, the government alleged King Kong...
SEC Charges yet Another Company for Violating Whistleblower Protection Rule
Posted 10/6/23
On September 29, the Securities and Exchange Commission (SEC) announced that New York-based investment adviser D. E. Shaw & Co. agreed to pay $10 million to settle charges of violating the SEC's Whistleblower Protection Rule. It is the third SEC settlement in September for violating the rule, which prohibits a company from taking any steps to interfere with a whistleblower's efforts or incentives to report potential...
SEC Takes Down Yet Another Company Trying to Silence Whistleblowers
Posted 09/28/23
It was only a few weeks ago that the Securities and Exchange Commission (SEC) slapped down Monolith Resources for forcing departing employees to sign separation agreements making them waive their right to any whistleblower rewards for reporting fraud to the government. In announcing that enforcement action, the SEC stressed the need for companies to appreciate that taking any steps to silence whistleblowers is...