SEC Whistleblower Program 2019 Annual Report Tells Story of Significant Impact - Despite Beginning the Year with a Government Shutdown
In its 2019 Annual Report to Congress, the SEC Office of the Whistleblower described its program as continuing to have a “significant impact” on enforcement and investor protection efforts. In the fiscal year that ended in September 2019, the SEC Whistleblower Program received the second highest number of tips in program history, and issued the third largest whistleblower award to date.
Three whistleblowers who jointly submitted a tip to the SEC were awarded $260,000. The information provided by the unidentified whistleblowers lead to a successful enforcement action against a fraud that targeted retail investors. The whistleblowers were reported to be investors who were themselves harmed by the conduct. SEC
Second Circuit Upholds SEC Denial of Whistleblower Rewards to Three Claimants in Deutsche Bank Settlement
In May 2015, Deutsche Bankagreed to pay a $55 million penalty to the SEC to settle charges that its financial statements misreported the value of a portfolio of derivatives, failing to take account of the material risk of potential losses associated with the derivatives. Subsequently, in November 2017, the SEC announced that it had awarded whistleblower rewards totaling $16 million to two whistleblowers “whose...
In Second-Ever Enforcement Action of Its Kind, SEC Stands with Whistleblower Against Company’s Attempt to Muzzle Reporting
Imagine that, after you invest in a company, you start to smell a rat. After you try to alert other investors or report what you believe is a fraudulent scheme, the company you invested in draws up an agreement that conditions your shareholding on a prohibition on speaking with regulatory agencies. If it seems illegal, that’s because it is. Yet that’s exactly what online auction and memorabilia company Collectors...
CATCH OF THE WEEK — Tenet Healthcare to Pay $66M Over Kickback Allegations
Tenet Healthcare, a healthcare giant that operates 65 hospitals and conducts over 10 million patient encounters annually, has agreed in principle to pay the United States roughly $66M to settle allegations that it violated the Stark Law and the Anti-Kickback Statute. These laws generally prohibit medical providers from paying or receiving kickbacks, remuneration, or anything of value in exchange for referrals of...
How to Report Visa Fraud for a Whistleblower Reward
Last week, the government announced that India-based management consulting firm Mu Sigma would pay $2.5 million to settle claims that it evaded H-1B visa requirements and brought employees to the U.S. on B1 visitor visas, misrepresenting the nature of their intended employment. In announcing the settlement, Immigration and Customs Enforcement stated that the Mu Sigma investigation was launched by a whistleblower...
Deutsche Bank Pays More than $16M to Settle SEC Charges of FCPA Violations
Last week, the SEC announced that German-based banking giant Deutsche Bank agreed to pay more than $16 million to settle charges it violated the Foreign Corrupt Practices Act (FCPA) by hiring relatives of foreign officials in China and Russia to get investment banking business. See SEC Press Release. According to the SEC’s order, these so-called "referral hires" bypassed the bank's merit-based hiring process and...
The SEC announced that a whistleblower has been awarded $1.8 million for reporting misconduct committed abroad. According to the SEC, the whistleblower’s tip and extensive cooperation—including providing ongoing information, document review, and sworn testimony—were critically important to bringing about a significant enforcement action. SEC
An international whistleblower has been awarded half a million dollars for helping the SEC with a successful enforcement action. Pursuant to the Dodd-Frank Act, the whistleblower’s identity was not revealed. SEC
Question of the Week — Should the SEC expedite its review of whistleblower claims?
Good things come to those who wait—at least that’s what most experienced whistleblowers will tell you. Whether they filed a complaint in court or submitted evidence to a regulatory agency, those who have reported fraud know firsthand that the legal process can take a great deal of time. Whistleblowers often wait several years before ever seeing the proverbial fruits of their labor. So when it comes to the...