Recent SEC Awards Likely to Attract Outside Whistleblowers

Whistleblower rules are designed to encourage employees with critical information about the misdeeds of their companies to come forward with the information. Qui tam laws prevent your employer – whether it is a private business or the federal government – from taking retaliatory action if you expose fraud or illegal practices. Recently, however, government agencies have started to pay outside experts money for whistleblowing.

Cases in Which the SEC Awarded Outside Whistleblowers

The Securities and Exchange Commission (SEC) recently paid its first award to an outside expert for a 2010 tip that led to the landmark 2012 enforcement action against the New York Stock Exchange (NYSE). The expert was Eric Hunsader, a well-known critic of high-frequency trading, and his information recently netted him an award in excess of $700,000.

Others appear to be following in Hunsader’s wake: an anonymous expert provided information to the U.S. Commodity Futures Trading Commission that led to its case against Navinder Sarao, a London-based trader who was accused of a market manipulation scheme that helped lead to the 2010 “flash crash.” A former Goldman Sachs trader took credit for providing the SEC with information leading to a $14 million enforcement action against Bats Global Markets Inc.’s Direct Edge unit.

Why the SEC Started to Award Outside Whistleblowers

The SEC’s failure to act on several warnings about infamous Ponzi schemer Bernie Madoff by an independent fraud examiner helped spur the creation of the SEC and CFTC whistleblower offices under the Dodd-Frank Act. Both programs allow the agencies to reward whistleblowers who bring the agencies original information that leads to an enforcement action netting more than $1 million in sanctions.

Hunsader may have been the first to receive remuneration for his tip, but he likely will not be the last.

Are You Thinking About Whistleblowing?

The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms and their employees for their wrongful actions. If you possess information about illegal activity either at your company or any other company, you may be entitled to an award if your information leads to sanctions. Contact us to schedule an appointment or consultation today.

Share This Story

Share your experience with investment fraud, and contribute to a community dedicated to protection and empowerment. Together, we can unveil strategies, share insights, and build a shield against financial deceit.

Let’s Discuss Your Case Today

When fighting for your rights, you may go up against some dangerous enemies. You want an attorney flying by your side to help navigate you through the twists and turns of the legal system. 

I Want To...
No Recovery, No Fees (888) 578-6255

Subscribe to our email!

Subscribe to our email!

Subscribe to our email!

uploadmagnifiercross linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram