What is the SEC Whistleblower Law?
In cases of fraud within the financial services industry, whistleblower protection is provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the Securities Exchange Commission (SEC) Whistleblower Law. This is a federal statute signed into law by President Obama on July 12,2010. It represented a major change in the American financial regulatory environment, and affects almost every aspect of the nation's financial services industry.
The SEC Whistleblower Act also gives the SEC powers of enforcement, including a "whistleblower bounty program." This allows people who provide information that leads to successful SEC enforcement to receive 10 to 30 percent of the monetary sanctions over $1 million.
Additionally, the Act amends the SEC Act of 1934 and the Investment Company Act of 1940 to allow the SEC to not disclose records or information that have been obtained for uses such as "surveillance, risk assessments, or other regulatory and oversight activities." The only exception is for judicial or congressional inquiry.
The Act was a response to the U.S. financial crisis that included bail-outs of major investment firms and banks, designed to prevent a collapse. It is hoped these new regulations will increase transparency within the financial services industry, protect consumers from investment fraud, and provide tools for managing future financial crises. It also provides international standards for the industry.
The Whistleblower Protection Act of 1989 is a federal law that protects federal whistleblowers who work for the government and report agency misconduct. Employers are forbidden from retaliating against employees because they file complaints, An employee may file a complaint about matters involving violation of a law, rule or regulation; gross mismanagement; gross waste of funds; abuse of authority; or substantial and specific danger to public health or safety.
What can I do?
If you feel you have a claim, our Alabama whistle blower attorneys would like to talk to you. You may be entitled to compensation. Contact us today for a free, no-obligation legal consultation.
Commodity Futures Trading Commission (CFTC)
What is the Commodity Futures Trading Commission (CFTC) Whistleblower Law?
The CFTC Whistleblower Law covers cases of fraud within the financial services industry, in particular in the commodities trading markets. It is created by section 748 of a federal statute officially known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Dodd-Frank Act was signed into law by President Obama in July 2010. Similar to the SEC Whistleblower Law, this law provides rewards to whistleblowers who uncover fraud and wrongdoing in the financial services industry; specifically, in the commodities trading markets. In order to recover a reward, the whistleblower's information must lead to a recovery in excess of $1 million. The whistleblower will receive 10-30 percent of the recovery.
What are so-called Whistleblower laws?
In 1863, Congress enacted the False Claims Act (also called the "Lincoln Law") to hold individuals and companies responsible when they defraud governmental programs. The FCA includes what is called "qui tam," shorthand for a Latin term, a provision that allows a person not affiliated with the government to file claims on behalf of the government. This has come to be known as "whistleblowing," because the person is drawing attention to fraud, or "blowing the whistle" on foul play. The "qui tam" provision of the False Claims Act allows citizens to sue on behalf of the government and be paid a percentage of the recovery. It is taken from the Latin phrase "qui tam pro domino rege quan pro se ipso in hac parte sequitur," which means "he who brings a case on behalf of our lord the King, as well as for himself." The qui tam representative, or whistleblower, in these cases also is called the "realtor." Separate from the False Claims Act, new laws also have been established to provide whistleblower protections for people who want to report fraud involving the Internal Revenue Service (IRS), called the IRS Whistleblower Law; and the Securities Exchange Commission (SEC), officially called the Dodd-Frank Wall Street Reform and Consumer Protection Act, but commonly referred to as the SEC Whistleblower Law. These cases have made a positive impact on our society by unveiling rampant corruption especially in the Government and Healthcare industry. We continue to explore this area of the law in cases all over this country.
What is an example of a Whistleblower case?
There are a number of types of fraud and corruption that may be investigated for violations of the False Claims Act and whistleblower laws. These include any instances where individuals or businesses attempt to solicit a fraudulent claim for payment. This may include payments for goods or services. Some examples of possible whistleblower investigations include:
- A contractor who falsifies test results or other information regarding the quality or cost of products it sells to the Government;
- A health care provider who bills Medicare for services that were not performed or were unnecessary;
- A grant recipient who charges the Government for costs not related to the grant;
- Possible violations of the federal securities law that results in penalties or recoveries by the SEC or agencies;
- Tax fraud of more than $2 million, or any fraud committed by an individual who makes more than $200,000 per year;
- Lying to the government about the true wholesale price of prescription drugs;
- Double billing
These are just a few examples. An attorney who specializes in Fraud litigation can help you determine if there is a case of FCA violation. You may also visit the Taxpayers Against Fraud (TAF) False Claims Act Legal Center for more information, at www.taf.org.
How do Whistleblower laws protect me?
When you initially file a fraud claim, your identity can be kept secret from the public and the Defendant, although it will be known to the court and the government. This "seal" is not permanent, however. Eventually, when the investigation is complete or on a judge's ruling, the information will be open for disclosure to the Defendant and to the public. Your Alabama whistle blower lawyer can talk to you about any possible exceptions to this procedure. There also is a part of the False Claims Act that is known as the "whistleblower protection" provision. This provision ensures that if you are fired, demoted, suspended, threatened or discriminated against in any other way by an employer as a result of your filing a report of fraud, that you will be reinstated to your former position. This includes receiving any seniority that may have been affected, as well as back pay, interest and other compensation that may be due as a result of damages or losses you suffered as a result of filing a claim.
What can I do?
We enjoy a distinct national reputation for excellence in the area of consumer fraud litigation. This litigation includes individual cases as well as class actions that have been filed throughout the country. Most of the cases involve wrongful conduct of insurance and finance companies including fraud and bad faith. We are also a national leader in the fight against mandatory binding arbitration in consumer contracts. If you or a loved one has become a victim of consumer fraud, you may be entitled to compensation. For a free legal consultation, contact us today!