Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgement or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.

Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post. Updated 5-17-2013.

 

NOTICE NO.	ACTION	NOTICE DATE	CLAIM DUE DATE
2013-51	In the Matter of Koninklijke Philips Electronics N.V. Administrative Proceeding File No.: 3-15265 Case filed: April 5, 2013 Qualifying Judgment/Order: April 5, 2013	5/17/2013	8/15/2013
2013-50	SEC v. Jorge Gomez and Roberto Aleph Espinosa Case number: 12-cv-21962 (United States District Court for the Southern District of Florida) Case filed: May 25, 2012 Qualifying Judgment/Order: June 12, 2012	5/17/2013	8/15/2013
2013-49	SEC v. Albert K. Hu, Asenqua, Inc., Asenqua Capital Management, LLC, AQC Asset Management, Ltd., and Fireside Capital Management, Ltd. Case number: 09-cv-1177 (United States District Court for the Northern District of California) Case filed: March 18, 2009 Qualifying Judgment/Order: April 26, 2013	5/17/2013	8/15/2013
2013-48	SEC v. Matthew John Ryan and Prime Rate And Return, LLC, individually and doing business as American Integrity Financial Co. Case number: 10-cv-0513 (United States District Court for the Northern District of New York) Case filed: May 3, 2010 Qualifying Judgment/Order: April 2, 2013	5/17/2013	8/15/2013
2013-47	SEC v. Grant Ivan Grieve; Finvest Asset Management, LLC; and Finvest Fund Management, LLC Case number: 09-cv-1198 (United States District Court for the Southern District of New York) Case filed: February 10, 2009 Qualifying Judgment/Order: April 29, 2013	5/17/2013	8/15/2013
2013-46	In the Matter of Capital One Financial Corporation, Peter A. Schnall, and David A. Lagassa Administrative Proceeding File No.: 3-15299 Case filed: April 24, 2013 Qualifying Judgment/Order: April 24, 2013	5/17/2013	8/15/2013
2013-45	SEC v. Richard Verdiramo, Vincent L. Verdiramo, Esq., Edward Meyer, Jr., and Victoria Chen Case number: 10-cv-1888 (United States District Court for the Southern District of New York) Case filed: March 10, 2010  Qualifying Judgment/Order: April 29, 2013	5/17/2013	8/15/2013
2013-44	Parker Drilling Company Case number: 13-cv-00461 (United States District Court for the Eastern District of Virginia) Case filed: April 16, 2013 Qualifying Judgment/Order: April 23, 2013	5/17/2013	8/15/2013
2013-43	SEC v. Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, R. Allen Stanford, James M. Davis, and Laura Pendergest-Holt Case number: 09-cv-00298 (United States District Court for the Northern District of Texas) Case filed: February 17, 2009 Qualifying Judgment/Order: April 25, 2013	5/17/2013	8/15/2013
2013-42	SEC v. Steven Brewer, Adam Erickson, Brewer Investment Group, LLC, Brewer Financial Services, LLC and Brewer Investment Advisors, LLC Case number: 10-cv-6932 (United States District Court for the Northern District of Illinois) Case filed: October 28, 2010 Qualifying Judgment/Order: March 29, 2013	5/17/2013	8/15/2013
2013-41	SEC v. True North Finance Corporation, f/k/a CS Financing Corporation, Capital Solutions Monthly Income Fund, LP, f/k/a Hennessey Financial Monthly Income Fund, LP, Capital Solutions Distributors, LLC, Capital Solutions Management, LP, Transactional Finance Fund Management, LLC, Todd A. Duckson, Michael W. Bozora, Timothy R. Redpath, and Owen Mark Williams  Case number: 10-cv-03995 (United States District Court for the District of Minnesota) Case filed: September 21, 2010 Qualifying Judgment/Order: April 15, 2013	5/17/2013	8/15/2013
2013-40	SEC v. Frank Bluestein Case number: 09-cv-13809 (United States District Court for the Eastern District of Michigan) Case filed: September 28, 2009 Qualifying Judgment/Order: April 24, 2013	5/17/2013	8/15/2013

More notices are listed in my previous post. 

• Print
• Comments
• Trackbacks
• Share Link

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgement or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.

Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post. Updated 4-23-2013.

Notice No.	Action	Notice Date	Claim Due Date
2013-39	SEC v. A Chicago Convention Center, LLC, Anshoo R. Sethi, and Intercontinental Regional Center Trust of Chicago, LLC Case number: 13-cv-00982 (United States District Court for the Northern District of Illinois) Case filed: February 6, 2013 Qualifying Judgment/Order: April 19, 2013	4/23/2013	7/22/2013
2013-38	SEC v. Big Apple Consulting USA, Inc., MJMM Investments, LLC, Marc Jablon, Matthew Maguire, Mark C. Kaley, and Keith Jablon Case number: 09-cv-1963 (United States District Court for the Middle District of Florida) Case filed: November 18, 2009 Qualifying Judgment/Order: March 29, 2013	4/15/2013	7/15/2013
2013-37	SEC v. 3 Eagles Research & Development LLC, Harry Dean Proudfoot III, Matthew Dale Proudfoot, Laurie Anne Vrvilo and Dennis Ashley Bukantis Case number: 12-cv-01289 (United States District Court for the District of Oregon) Case filed: July 17, 2012 Qualifying Judgment/Order: March 19, 2013	4/15/2013	7/15/2013
2013-36	In the Matter of Banco Comercial Português, S.A. Administrative Proceeding File No.: 3-15248 Case filed: March 18, 2013 Qualifying Judgment/Order: March 18, 2013	4/15/2013	7/15/2013
2013-35	SEC v. Verde Retirement LLC, a California limited liability company, Verde FX Nevada, LLC, a California limited liability company, Covenant Capital Partners, a California corporation, and Steven L. Hamilton Case number: 12-cv-0445 (United States District Court for the Southern District of California) Case filed: February 21, 2012 Qualifying Judgment/Order: March 28, 2013	4/15/2013	7/15/2013
2013-34	SEC v. City Capital Corporation, Ephren W. Taylor, II, and Wendy Jean Connor Case number: 12-cv-1249 (United States District Court for the Northern District of Georgia) Case filed: April 12, 2012 Qualifying Judgment/Order: March 7, 2013	4/15/2013	7/15/2013
2013-33	SEC v. Derek A. Nelson, Capital Mountain Holding Corp., Systems XXI, Act I, LLC, and Systems XXI, Act II, LLC Case number: 09-cv-2222 (United States District Court of the Northern District of Texas) Case filed: November 20, 2009 Qualifying Judgment/Order: March 6, 2013	4/15/2013	7/15/2013
2013-32	SEC v. Bridge Premium Finance, LLC (f/k/a Berjac of Colorado, LLC), Michael J. Turnock, and William P. Sullivan, II Case number: 12-cv-2131 (United States District Court for the District of Colorado) Case filed: August 14, 2012 Qualifying Judgment/Order: March 11, 2013	4/15/2013	7/15/2013
2013-31	SEC v. K2 Unlimited, Inc., 211 Ventures, LLC, Diane Glatfelter, Robert C. Rice, and Robert S. Anderson Case number: 11-cv-11649 (United States District Court for the District of Massachusetts) Case filed: September 19, 2011 Qualifying Judgment/Order: March 13, 2013	4/15/2013	7/15/2013
2013-30	SEC v. M. Mark McAdams and R. Dane Freeman Case number: 10-cv-00701 (United States District Court for the District of South Carolina) Case filed: March 18, 2010 Qualifying Judgment/Order: March 1, 2013	4/15/2013	7/15/2013
2013-29	SEC v. Oversea Chinese Fund Limited Partnership, Weizhen Tang & Associates, Inc., Weizhen Tang Corp., Winwin Capital Management, LLC, Winwin Capital Limited Partnership, J.O.R. & Associates, LLC, and Weizhen Tang Case number: 09-cv-0614 (United States District Court for the Northern District of Texas) Case filed: April 3, 2009 Qualifying Judgment/Order: October 1, 2012	4/15/2013	7/15/2013
2013-28	SEC v. EFS, LLC, Freedom Fidelity, LLC, James N. Pratt, SP&V, LLC, and Timothy V. Coffin Case number: 06-cv-0793 (United States District Court for the Northern District of Texas) Case filed: May 3, 2006 Qualifying Judgment/Order: October 17, 2012	4/15/2013	7/15/2013
2013-27	SEC v. Merendon Mining (Nevada) Inc, Larry Lee Adair, Milowe Allen Brost a/k/a/ Milow Brost, M.B. Gonne or Phillip K. Collins, Ward K. Capstick, Bradley Dean Regier, Gary Allen Sorenson a/k/a Don Grey Fox, Martin M. Werner, Syndicated Gold Depository Inc, now known as Bahamas Resources Alliance Ltd., Merendon Mining Corp. Ltd., Institute For Financial Learning Group of Companies, Inc. Case number: 10-cv-00955 (United States District Court for the Western District of Washington) Case filed: June 10, 2010 Qualifying Judgment/Order: October 30, 2012	4/15/2013	7/15/2013
2013-26	SEC v. Chetan Kapur and Lilaboc, LLC, d/b/a ThinkStrategy Capital Management, LLC. Case number: 11-cv-8094 (United States District Court for the Southern District of New York) Case filed: November 10, 2011 Qualifying Judgment/Order: November 29, 2012	4/15/2013	7/15/2013

 

 

More notices are listed in my previous post. 

• Print
• Comments
• Trackbacks
• Share Link

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgement or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.

Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post.

Notice No.	Action	Notice Date	Claim Due Date
2013-25	SEC v. Douglas F. Vaughan, The Vaughan Company, Realtors, Inc., and Vaughan Capital, LLC. Case number: 10-cv-00263 (United States District Court for the District of New Mexico) Case filed: March 23, 2010 Qualifying Judgment/Order: February 14, 2013	03/11/2013	06/10/2013
2013-24	SEC v. Sky Way Global LLC (A/K/A Sky Way Global, Inc.), Brent C. Kovar, Glenn A. Kovar, James S. Kent, Kenneth Bruce Baker (A/K/A Bruce Baker), and Kenneth R. Kramer Case number: 09-cv-00455 (United States District Court for the Middle District of Florida) Case filed: March 13, 2009 Qualifying Judgment/Order: February 22, 2013	03/11/2013	06/10/2013
2013-23	SEC v. Peter Siris, Guerrilla Capital Management, LLC, and Hua Mei 21st Century, LLC Case number: 12-cv-05810 (United States District Court for the Southern District of New York) Case filed: July 30, 2012 Qualifying Judgment/Order: September 18, 2012	03/11/2013	06/10/2013
2013-22	SEC v. J.C. Reed & Company, Inc., J.C. Reed Advisory Group, LLC, Barron A. Mathis, and Estate of John C. Reed, Lana L. Reed Executrix Case number: 08-cv-01112 (United States District Court for the Middle District of Tennessee) Case filed: November 18, 2008 Qualifying Judgment/Order: February 26, 2013	03/11/2013	06/10/2013
2013-21	In the Matter of Oppenheimer Asset Management Inc. and Oppenheimer Alternative Investment Management, LLC Administrative Proceeding File No.: 3-15238 Case filed: March 11, 2013 Qualifying Judgment/Order: March 11, 2013	03/11/2013	06/10/2013
2013-20	SEC v. Sean David Morton, Vajra Productions, LLC, 27 Investments, LLC, and Magic Eight Ball Distributing, Inc. Case number: 10-cv-1720 (United States District Court for the Southern District of New York) Case filed: March 4, 2010 Qualifying Judgment/Order: February 13, 2013	03/11/2013	06/10/2013
2013-19	SEC v. Gilbert G. Lundstrom, James A. Laphen, and Trevor A. Lundstrom Case number: 12-cv-00343 (United States District Court for the District of Nebraska) Case filed: Month DD, YYYY Qualifying Judgment/Order: September 25, 2012	03/11/2013	06/10/2013
2013-18	SEC v. Innovative Advisory Services, Inc., Innovative Advisory Services LLC, Island Trader LLC and Richard H. Nickles Case number: 10-cv-00423 (United States District Court for the Central District of California) Case filed: April 7, 2010 Qualifying Judgment/Order: September 24, 2012	03/11/2013	06/10/2013
2013-17	In the Matter of Focus Point Solutions, Inc., The H Group, Inc., and Christopher Keil Hicks Administrative Proceeding File No.: 3-15011 Case filed: September 6, 2012 Qualifying Judgment/Order: September 6, 2012	03/11/2013	06/10/2013
2013-16	SEC v. Howard Brett Berger Case number: 12-cv-4728 (United States District Court for the Eastern District of New York) Case filed: September 21, 2012 Qualifying Judgment/Order: January 22, 2013	03/11/2013	06/10/2013

You can find more Notices in my previous blog post here.

• Print
• Comments
• Trackbacks
• Share Link

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgement or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.

Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post.

Notice No.	Action	Notice Date	Claim Due Date
2013-15	SEC v. David E. Ruskjer Case number: 09-cv-237 (United States District Court for the District of Hawaii) Case filed: May 27, 2009 Qualifying judgment/order: January 2, 2013	02/08/2013	05/09/2013
2013-14	SEC v. Eli Lilly and Company Case number: 12-cv-2045 (United States District Court for the District of Columbia) Case filed: December 20, 2012 Qualifying judgment/order: January 2, 2013	02/08/2013	05/09/2013
2013-13	SEC v. Igor Poteroba, Aleksey Koval and Alexander Vorobiev Case number: 10-cv-2667 (United States District Court for the Southern District of New York) Case filed: March 24, 2010 Qualifying judgment/order: January 15, 2013	02/08/2013	05/09/2013
2013-12	SEC v. J.P. Morgan Securities LLC, EMC Mortgage, LLC, Bear Stearns Asset Backed Securities I, LLC, Structured Asset Mortgage Investments II, Inc., SACO I, Inc., and J.P. Morgan Acceptance Corporation I Case number: 12-cv-1862 (United States District Court for the District of Columbia) Case filed: November 16, 2012 Qualifying judgment/order: January 8, 2013	02/08/2013	05/09/2013
2013-11	SEC v. Gary J. Martel, D/B/A Martel Financial Group, and MFG Funding Case number: 12-cv-11095 (United States District Court for the District of Massachusetts) Case filed: June 19, 2012 Qualifying judgment/order: January 7, 2013	02/08/2013	05/09/2013
2013-10	SEC v. Management Solutions, Inc., a Texas Corporation; Wendell A. Jacobson; and Allen R. Jacobson Case number: 11-cv-1165 (United States District Court for the District of Utah) Case filed: December 15, 2011 Qualifying judgment/order: December 18, 2012	1/4/2013	4/4/2013
2013-9	SEC v. BP p.l.c. Case number: 12-cv-2774 (United States District Court for the Eastern District of Louisiana) Case filed: November 15, 2012 Qualifying judgment/order: December 10, 2012	1/4/2013	4/4/2013
2013-8	SEC v. Tiger Asia Management, LLC, Tiger Asia Partners, LLC, Sung Kook (a/k/a Bill) Hwang, and Raymond Y.H. Park Case number: 12-cv-7601 (United States District Court for the District of New Jersey) Case filed: December 14, 2012 Qualifying judgment/order: December 17, 2012	1/4/2013	4/4/2013
2013-7	SEC v. Igor Cornelsen and Bainbridge Group Inc. Case number: 12-cv-8712 (United States District Court for the Southern District of New York) Case filed: November 30, 2012 Qualifying judgment/order: December 11, 2012	1/4/2013	4/4/2013
2013-6	In the Matter of Allianz SE Administrative Proceeding File No.: 3-15132 Case filed: December 17, 2012 Qualifying judgment/order: December 17, 2012	1/4/2013	4/4/2013
2013-5	SEC v. Francis E. Wilde, Steven E. Woods, Mark A. Gelazela, Bruce H. Haglund, Matrix Holdings LLC, BMW Majestic LLC, IDLYC Holdings Trust LLC, and IDYLC Holdings Trust Case number: 11-cv-00315 (United States District Court for the Central District of California) Case filed: February 24, 2011 Qualifying judgment/order: December 18, 2012	1/4/2013	4/4/2013
2013-4	In the Matter of Fiduciary Asset Management, LLC Administrative Proceeding File No.: 3-15140 Case filed: December 19, 2012 Qualifying judgment/order: December 19, 2012	1/4/2013	4/4/2013
2013-3	SEC v. EagleEye Asset Management, LLC and Jeffrey A. Liskov Case number: 11-cv-11576 (United States District Court for the District of Massachusetts) Case filed: September 8, 2011 Qualifying judgment/order: December 12, 2012	1/4/2013	4/4/2013
2013-2	In the Matter of Aladdin Capital Management LLC and Aladdin Capital LLC Administrative Proceeding File No.: 3-15134 Case filed: December 17, 2012 Qualifying judgment/order: December 17, 2012	1/4/2013	4/4/2013
2013-1	SEC v. I. Joseph Massoud Case number: 12-cv-01691 (United States District Court for the District of Connecticut) Case filed: November 30, 2012 Qualifying judgment/order: December 10, 2012	1/4/2013	4/4/2013
2012-130	SEC v. Well Advantage Limited, Certain Unknown Traders in the Securities of Nexen, Inc. In an Account of Phillip Securities PTE LTD., and Certain Unknown Traders in the Securities of Nexen, Inc. in an Account of Citibank NA A/C HK 4 Case number: 12-cv-5786 (United States District Court for the Southern District of New York) Case filed: July 27, 2012 Qualifying Judgment/Order: November 7, 2012	12/7/2012	3/7/2013
2012-129	SEC v. Kenneth Ira Starr, Starr Investment Advisors, LLC, Starr & Company, LLC, and Jonathan Star Bristol Case number: 10-cv-4270 (United States District Court for the Southern District of New York) Case filed: May 27, 2010 Qualifying Judgment/Order: November 15, 2012	12/7/2012	3/7/2013
2012-128	SEC v. Kris Chellam Case number: 12-cv-7983 (United States District Court for the Southern District of New York) Case filed: October 26, 2012 Qualifying Judgment/Order: November 5, 2012	12/7/2012	3/7/2013
2012-127	SEC v. Christel S. Scucci, Karen S. Beach, Cameron H. Linton, Esq., Protégé Enterprises, LLC, and Capital Edge Enterprises, LLC Case number: 12-cv-00646 (United States District Court for the Middle District of Florida) Case filed: April 30, 2012 Qualifying Judgment/Order: November 5, 2012	12/7/2012	3/7/2013
2012-126	In the Matter of Credit Suisse Securities (USA) LLC; DLJ Mortgage Capital, Inc.; Credit Suisse First Boston Mortgage Acceptance Corp.; Credit Suisse First Boston Mortgage Securities Corp.; and Asset Backed Securities Corporation Administrative Proceeding File No.: 3-15098 Case filed: November 16, 2012 Qualifying Judgment/Order: November 16, 2012	12/7/2012	3/7/2013
2012-125	SEC v. Joseph J. Monterosso, Luis E. Vargas, Lawrence E. Lynch, and Timothy Huff Case number: 7-cv-61693 (United States District Court for the Southern District of Florida) Case filed: November 21, 2007 Qualifying Judgment/Order: November 16, 2012	12/7/2012	3/7/2013
2012-124	SEC v. Anand Sekaran and Wasson Capital Advisors Ltd. Case number: 12-cv-8199 (United States District Court for the Southern District of New York) Case filed: November 9, 2012 Qualifying Judgment/Order: November 26, 2012	12/7/2012	3/7/2013

• Print
• Comments
• Trackbacks
• Share Link

Under a new program championed by the National Whistleblowers Center (NWC) to reduce securities fraud, the Securities and Exchange Commission (SEC) today announced its first whistleblower award of nearly $50,000.

The SEC's announcement is the mark of success for its new Whistleblower Program, which was established one year ago after passage of the Dodd-Frank Act. During the Dodd-Frank rule-making process, the SEC approved a variety of proposals made by the NWC that encourage whistleblowers to step forward.

Specifically, NWC proposed incentives for employees who report wrongdoing internally and rewards for employees whether they choose to file their whistleblower claims with the company or with the government.

Stephen M. Kohn, Executive Director of the National Whistleblowers Center, made the following statement: 

This is a major step forward. The SEC Whistleblower Program is demonstrating that it works quickly and effectively to deter fraud. Whistleblowers are the number one resource for detecting fraud, and every agency can learn from the SEC's successful Whistleblower Program. Today’s announcement sends a simple message to securities fraudsters: beware. My hat is off to the SEC for protecting investors.

• Print
• Comments (1)
• Trackbacks
• Share Link

Tune in today at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

We invited candidates from one of the most hotly-contested House races, incumbent Michael Grimm and Mark Murphy, to come on the show to discuss the Grimm Act (H.R. 2483) with host Steve Kohn. The Grimm Act would reverse the corporate whistleblower protections passed in the Dodd-Frank Wall Street Reform Act. Congressman Grimm did not respond to the interview request, but candidate Murphy discusses his position on the Grimm Act and whistleblower protections.

Additionally, whistleblower Eugene Ross and attorney Jordan Thomas will join Steve to weigh in on how the Grimm Act will impact corporate culture. Eugene Ross blew the whistle on corporate fraud at Bear Stearns, and Jordan Thomas is partner at Labaton Sucharow and former SEC official who worked on drafting the SEC rules for Dodd-Frank.

 
Submit Your Question to be asked on air during the show or call in to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

• Print
• Comments
• Trackbacks
• Share Link

By Guest Columnist: Donna Boehme
Principal at Compliance Strategists LLC and editor of the weekly CS Newsflash (and former chief compliance and ethics officer at two leading multinationals)

Holy Wal-Mart Whitewash, Batman!  Without a doubt, the unfolding Wal-Mart bribery scandal in Mexico (coming soon to a business school case study near you) is ripe for “lessons learned”  for governance experts everywhere.   But it is also illuminating to drill down a little further and examine the implications from a whistleblower point of view.   

It’s true that only some of the facts are known so far, revealed in an exhaustive New York Times 8,000+ word investigative report.  But those reported facts are not boding well for the giant retailer.  This we know:  1) in 2005, a whistleblower with intimate knowledge of a Mexican bribery scheme (to secure permits and rapidly expand the market share) sent an email raising the flag to the international general counsel 2) although that international GC strongly recommended an expanded independent investigation, she was overruled (and ultimately resigned) 3) the top GC, CEO and “a small group of executives”  decided to refer the investigation to the very Mexican GC who authorized the bribes in the first place, who then 5) promptly closed the matter with a finding of “nothing to see here”  6) Wal-Mart decided to “self-report” only after learning of the soon-to-be newspaper expose and 7)  none of the execs or legal counsel involved in the handling of the matter have been fired or disciplined,  and a few have even been promoted.   Whew!  

As this tale of corporate whistleblower woe publicly unfolds, what have we learned? Early observations from the whistleblower standpoint:

• Print
• Comments
• Trackbacks
• Share Link

(The First Seven Months of the SEC Dodd Frank Whistleblower Program)

By Guest Columnist: Donna Boehme
Principal at Compliance Strategists LLC and editor of the weekly CS Newsflash

So far, the sky has not fallen. That’s not to say there isn’t some curious weather activity.

Now that the SEC has logged at least seven full months of the Dodd Frank whistleblower program, it’s worth taking a moment for a brief status check on what we have learned so far. To do that we might consider two available clues: a public comment from an SEC official and the fate of a GE whistleblower who is suing the company for retaliation.

First, the SEC. Recently Sean McKessy, head of the new SEC whistleblower program, commented about the 2000 tips returned to date: "I'd be hard pressed to think of one where it was a true insider tip that was not reported to anyone else." That little nugget pretty much validates the results of the National Whistleblowers Center qui tam study that found nearly 90% of qui tam plaintiffs attempted to report their concerns either to their supervisors or compliance departments, before going to the government. This mirrors the anecdotal stories from advocates who say that by the time most whistleblowers come forward, they have already tried to report their concerns internally, not once, but three, four, nine times, and have been kicked in the shins (or far worse) for their troubles.

• Print
• Comments (5)
• Trackbacks
• Share Link

Yesterday's conviction of Ponzi schemer Allen Stanford generated much news.  Most of the coverage, however, is missing the role of whistleblower Leyla Wydler.  Two weeks ago on Honesty Without Fear, I interviewed Eyal Press about his new book, Beautiful Souls: Saying No, Breaking Ranks, and Heeding the Voice of Conscience in Dark Times. We discussed his chapter about Wydler's resistance to Stanford's pressure to get clients to invest in his scheme.  Eventually, Wydler concluded that it was a Ponzi scheme, and she refused to sell the scheme to her clients.  Stanford fired her. She reported the fraud to the authorities.  The Securities and Exchange Commission (SEC) ignored her warnings.  She could not sue Stanford in court because of a forced arbitration agreement.  The securities arbitrator not only rejected her whistleblower retaliation claim, but also ordered her to repay her $100,000 signing bonus. (Under the 2010 Dodd-Frank Act, whistleblowers like Wydler are no longer bound by forced arbitration agreements.)

Yesterday, Eyal Press posted an article on Counterpunch and Middle East Online about Wydler and Countrywide whistleblower Eileen Foster. It is called Chilling Dissent on Wall Street. He contrasts the way the federal government has become hot to prosecute national security whistleblowers, but the concerns of financial fraud whistleblowers can be ignored. In Stanford's case, the SEC failed to act on Wydler's reports for years as Stanford continued to rake in money from more now-victimized investors.

As if being ignored is not bad enough, Press also notes how some members of Congress want to make it harder for whistleblowers to win their claims under the Dodd-Frank Law.  The bill by Rep. Michael Grimm would require whistleblowers to raise their concerns with their employer before going to the SEC, and would require the SEC to disclose whistleblower claims to the company alleged to be violating the law.  Really.  How is tipping off the crook to the impending federal investigation a good law enforcement strategy? Follow this link to TAKE ACTION against the Grimm bill.

Bloomberg News reports on Wydler's role in reporting Stanford's scheme.  Insurance Journal is reporting that Stanford's conviction will be a boost to several civil lawsuits seeking to hold attorneys and others responsible for covering up the fraud. Hopefully, with the new whistleblower protections and rewards for whistleblowers in the Dodd-Frank Act, schemes like Stanford's will become less common, and will be stopped more quickly when whistleblowers file claims with the SEC and CFTC.

• Print
• Comments
• Trackbacks
• Share Link

This week, the FBI released a public service announcement by actor Michael Douglas encouraging the public to report financial fraud. On its face this sounds like a good thing. However, the FBI left out some key information, namely other avenues of reporting that are likely better for whistleblowers.

There are robust financial incentives for filing a claim with the Securities Exchange Commission (SEC), the Internal Revenue Service (IRS), and the Commodity Futures Trading Commission. NWC General Counsel David Colapinto told the Washington Post if a whistleblower goes “to the FBI, they are probably going to get zero. The FBI’s not obligated to do anything for them.” The FBI’s rewards would be solely at the discretion of the Department of Justice. This is scary. Just take a look at how they treat their own whistleblowers.

As pointed out by the Huffington Post, the financial crisis has put financial fraud on more people’s radar. The SEC has seen an increase in securities fraud reports, despite the fact that nearly 70 percent of Americans are unaware of the SEC’s whistleblower program (see recent report by Labaton Sucharow).

If the FBI is truly interested in encouraging people to come forward and protecting those who do, they should not hide the ball. Give workers information about all their rights, including the much more robust financial reward programs at the SEC, IRS and the CFTC.

We always tell whistleblowers who contact us that is in their best interest to know their rights before they blow the whistle. Make sure you educate yourself and consult an attorney before you blow the whistle.

• Print
• Comments
• Trackbacks
• Share Link