SEC Fraud

Enron, Worldcom, Bernie Madoff, Credit Default Swaps and the Mortgage Meltdown -- unfortunately securities fraud is alive and well and more complex than ever.  Securities fraud is broadly defined and can include misconduct such as the issuance of false or misleading statements in financial reports of public companies, outright theft, insider training, ponzi schemes and front running.  In an effort to ferret out fraudulent misconduct, in 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act. Part of this reform package provided for the creation of Whistleblower Reward Programs through both the Securities & Exchange Commission ("SEC") and the Commodities Futures Trading Commission ("CFTC").

The new SEC and CFTC Whistleblower Programs provide for financial rewards to whistleblowers who properly report covered fraudulent misconduct and where such reports lead to a civil recovery on the part of the respective government agency.  For example, a whistleblower who reports ANY securities law violations will receive a reward if the SEC and any other government authorities recover more than $1 million based on that information.

Below are several relevant aspects of the new SEC Whistleblower Program as provided in the Act:

A whistleblower will receive 10 percent to 30 percent of the monies the SEC and other government authorities collect based on the whistleblower's information if more than $1 million is collected. The percentage of the reward is set at the discretion of the SEC taking into consideration the following:

• The significance of the information provided;
• The assistance provided by the whistleblower and the whistleblower's attorney;
• The programmatic interest of the Commission in deterring violations of the securities law; and,
• Additional relevant factors the Commission may establish by rule or regulation.

Egan Young attorneys have been litigating securities fraud cases for over a decade.  If you or someone you know has discovered securities fraud, call EY today for a free confidential consultation.