Securities Fraud

April 23, 2021

The SEC has granted awards totaling more than $3 million to two whistleblowers whose information led to two separate enforcement actions.  The first whistleblower was awarded approximately $3.2 million for helping to conserve agency resources by identifying key issues to focus on and providing subject matter expertise.  The second whistleblower was awarded more than $100,000 for significant information and ongoing assistance that helped stop an ongoing fraud.  SEC

April 15, 2021

The SEC has awarded two whistleblowers a joint award of over $50 million for providing information, voluminous documents, and substantial assistance that led to the return of tens of millions of dollars to harmed investors.  According to the SEC, the fraud scheme at issue involved highly complex transactions that would have been difficult for the agency to detect.  SEC

April 9, 2021

The SEC has awarded approximately $2.5 million to an individual who provided key information and evidence regarding a breach of fiduciary duties to investors.  The whistleblower’s assistance contributed substantially to a successful enforcement action.  SEC

March 29, 2021

The SEC has awarded an anonymous whistleblower $500,000 based on recoveries in a covered action and a related action that resulted in the shut-down of an ongoing fraudulent scheme. The whistleblower first reported the alleged misconduct to their employer, using the employer’s internal compliance procedures.  Then, within 120 days of reporting the violations internally, the whistleblower submitted a TCR to the SEC.  According to the SEC, the whistleblower provided significant information that prompted it to open an investigation, and provided ongoing assistance to Commission staff.  Separately, the employer began an internal investigation and ultimately made a report to a government agency.  Because the whistleblower reported internally and to the SEC within 120 days of their internal report, the SEC applied its “safe harbor” rule and treated the whistleblower’s SEC submission as if it had been made on the day that the whistleblower reported internally.  SEC

March 26, 2021

David Boice, the co-founder and CEO of Trustify Inc., was sentenced to 8 years in prison and ordered to pay $18.1 million in restitution and $3.7 million in forfeiture following SEC charges that Boice misrepresented Trustify, an online marketplace purportedly designed to connect customers to a network of private investigators, as a successful business, fraudulently offering and selling over $18.5 million of securities to more than 250 individual and corporate investors.  Boice inflated company revenues in financial statements, fabricated customer relationships, forged correspondence purportedly from potential investors, and misrepresented the use of investor funds.  Trustify was placed in corporate receivership in 2019.  USAO ED VA