Securities Cases

The SEC Office of the Whistleblower (OWB) has released its Fiscal Year 2015 Dodd-Frank Whistleblower Program report to Congress. Dodd-Frank offers substantial monetary awards to individuals with information that leads to successful enforcement actions. This year’s report confirms the program’s continued growth and success. Since its inception in August 2011, tips are up 30% and $54 million has been awarded to whistleblowers for their efforts.
SEC Tips, Claims and Award Payouts...

Dennis Edmonds was a stockbroker in North Carolina; Ellwood Jones, a wealth manager in California; and the firm of Foster & Dunhill peddled so-called “business protection plans” in Florida.

They all had one nefarious thing in common, according to Ohio-based investor-rights attorney John Chapman -- they all put their clients into Nikolai Battoo’s “Private International Wealth Management (PIWM)” portfolios, with the bogus claim that Battoo was a financial genius of epic proportions.

Two Peas in a Pod – PIWM’s Nikolai Battoo and Madoff

The PIWM turned out to be a massive Ponzi scheme connected to the infamous Bernard Madoff. Investors lost $20 billion in Madoff’s house-of-cards scam....

A $1.4 million SEC whistleblower reward to a corporate compliance officer for reporting company misconduct has caused a tremor through GC, compliance, and audit offices of non-compliant corporations but it signals something tectonic is coming soon according to legal experts. The architect of December’s massive Bank of America $16.6B False Claims Act settlement says the SEC action affirms compliance professionals are also eligible for the more lucrative False Claims Act whistleblower rewards that can reach $100M.

Compliance Officer Scores $1.4M in SEC Whistleblower Action

On April 22 the Securities Exchange Commission (SEC) announced a $1.4 million whistleblower reward to a compliance officer who reported information and provided evidence in an SEC enforcement action against the whistleblower’s corporation....

The U.S. Securities Exchange Commission fired a $130,000 warning shot at corporate America, fining Houston-based KBR this amount for drafting employee confidentiality agreements to thwart employee SEC whistleblowing for malfeasance. The whistleblower bar calls it an historic step forward for whistleblowers while a prominent pro-business group calls it overreaching.

Harry Barko Whistleblower Lawsuit Brought KBR’s Faulty NDAs to Light

The SEC alleged former Halliburton subsidiary KBR, Inc. included language in their employee confidentiality agreements that effectively required workers to get KBR’s legal department to sign off in advance on any disclosures, including blowing the whistle on corporate wrongdoing – even to the SEC or the Department of Justice, under penalty of firing or other discipline....

The Securities and Exchange Commission (SEC) has awarded an unnamed whistleblower the maximum monetary award (30 percent of the settlement amount) in its first anti-retaliation case. An employee of New York-based hedge fund advisory firm, Paradigm Capital Management, alleged the employer was engaging in illicit transactions and subjected the employee to demotion and harassment as a result of the allegations. An SEC spokesperson reports this award will demonstrate SEC support of whistleblowers and anti-retaliation laws.

Paradigm Capital Management Allegedly Demoted and Harassed SEC Whistleblowing Employee

In 2012, an employee presented information to the SEC alleging Paradigm Capital Management was involved in illicit transactions with a broker-dealer while trading for a hedge-fund client with the intention of reducing investors’ tax liability....