Keeping the securities industry fair is not easy, which means that the Securities and Exchange Commission of the United States (the SEC) has a big job to do. The SEC is an independent federal agency charged with regulating the securities industry and enforcing federal securities laws. It’s no secret that fraud and corruption occur within the securities industry. Investigating instances of possible fraud and corruption within the securities industry and pursuing legal action against individuals and business entities that violate securities laws are the means by which the SEC fulfills its duty to enforce federal securities laws.
Before individuals and companies that violate securities laws can be punished, their wrongdoing must be identified and proven. The SEC depends on whistleblowers from within the securities industry to direct the agency’s attention to potential violations of securities law so that the agency can investigate them. While not every investigation leads to the discovery of an actual breach of securities law, many of them do. Violators of federal securities laws face financial penalties, as well as other penalties, including but not limited to jail time.
In 2010, the SEC instituted its whistleblower incentive program. The program encourages people who work in the securities industry to report possible violations of federal securities laws. Workers who witness securities law violations can submit tips to the SEC anonymously. People who come forward and report potential violations of the law are rewarded for doing so with significant support in protecting their employment and, in cases where violations are found and financial penalties assessed, compensated.
It’s only January, and the SEC has already made two financial awards to whistleblowers this year. The SEC awarded forty-five thousand dollars to an investor who provided information that helped the SEC shut down a fraudulent investment scheme that had harmed them as well as other investors. The SEC was able to recover assets that had been lost by the injured investors and return them. In another action, the SEC awarded over two hundred and seventy thousand dollars to a whistleblower who alerted the agency to an ongoing fraudulent scheme. Upon receiving the information from the whistleblower, the agency was able to shut down the fraudulent scheme that targeted retail investors.
While the total amount of whistleblower claims investigated by the SEC in financial year 2019 was lower than it was in previous years, the agency hopes to regain its momentum this year and continue to increase the number of whistleblower claims it investigates each year. The SEC is grateful to the individuals who provide tips to the agency because time and time again, the whistleblowers save the agency time and money in identifying, investigating, and prosecuting securities law violations. Whistleblowers who make reports to the SEC help the agency enforce the securities laws that protect American investors and sometimes even lead to the recovery and return of lost assets to investors who were harmed by securities law violations.
SEC whistleblowers and whistleblowers in other agencies and industries are protected from retaliation. If you have experienced retaliation as the result of reporting fraud, waste, safety violations, or other concerns, call the Mississippi Whistleblower Attorney of Barrett Law PLLC today at 1 (800) 707-9577 for an initial consultation.