Under the 2010 Dodd Frank Act, the Securities and Exchange Commission was tasked with organizing and implementing a whistleblower program similar to the False Claims Act – which has proven widely successful since its inception in the 1800’s. As a result, the SEC worked tirelessly to create its Office of the Whistleblower (“OWB”) and has since garnered international attention for its proven success at curtailing fraud within the securities industry. The OWB handles whistleblower complaints from across the world dealing with allegations of securities-related fraud, such as insider trading or fraudulent disclosures involving U.S.-based traders and securities companies. It runs its complaint department much like the DOJ handles False Claims Act cases, allowing for an initial screening, a preliminary investigation and, if successful, an award of up to 30 percent for the qui tam plaintiff.
SEC Releases Its Goals Through 2018
The SEC recently released a report, which is open for public comment through March, detailing its plans through 2018 with regard to whistleblower complaints, the complaint process, and additional measures to help strengthen the program. It premised its proposals on the need to address the increasingly global nature of securities trading and the various hurdles that accompany international financial transactions. The SEC’s overarching goal is to ensure it is matching regulatory frameworks in other nations, allowing for an easier, more streamlined approach to handling instances of securities fraud.
The SEC also outlined several other goals over the next several years. Under Strategic Goal One, the SEC hopes to better engage with other federal agencies and stakeholders when responding to allegations of fraud, as well as encourage further public comment on matters relating to securities fraud. Strategic Goal Two addresses the OWB’s commitment to promptly respond to claims and offer whistleblowers an answer as to whether their claim contains merit within a reasonable time period. Under Strategic Goal Three, the SEC hopes to maintain and enhance relationships with ethical investors, thereby allowing it to better understand the needs and expectations of those directly involved in the securities trading markets. Finally, Strategic Goal Four outlines the need to leverage strategic alliances with other federal agencies, as well as the increased use of cutting-edge technology to address the highly technical securities market.
Contact a Whistleblower Attorney With Questions About Securities Fraud
Much like the FCA, the SEC’s whistleblower program requires plaintiffs to navigate a complex process. The assistance of a whistleblower attorney familiar with the qui tam process can be invaluable in obtaining a successful result. You must have original information of fraud and the information you have must not be public knowledge, part of a court document, or otherwise already disseminated through the media. It may also be reassuring to know that claims of securities fraud under the Dodd Frank Act include protections from wrongful termination or retaliation by your employer. In other words, your employer cannot fire you for reporting alleged insider trading or faulty disclosures.
As you consider whether to come forward with allegations of securities fraud, remember that the SEC is robustly committed to eliminating this type of misconduct and, with the help of a knowledgeable attorney, you may be able to recover up to 30 percent of the eventual settlement or verdict.