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The SEC recently reached a $3 million collective settlement with seven public companies charged with violating whistleblower protection Rule 21F-17(a). This rule prohibits any actions by companies that impede an individual from communicating directly with the SEC staff about a possible securities law violation they observe. The companies cited were: Acadia Healthcare Company Inc., $1.3 million k.a. Brands Holding Corp., $399,000 AppFolio, Inc., $692,000 IDEX Corp., $75,000 LSB Industries, Inc., $156,000 Smart for Life, Inc., $19,500The SEC recently reached a $3 million collective settlement with seven public companies charged with violating whistleblower protection Rule 21F-17(a). This rule prohibits any actions by companies that impede an individual from communicating directly with the SEC staff about a possible securities law violation they observe. Continue reading

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The SEC recently announced that it has awarded money to two whistleblowers for their information that led to an SEC enforcement action against a company as well as a related action against the same company by another federal agency. Both individuals voluntarily provided critical information that led to the successful enforcement actions. In the first case, Claimant #1 brought the misconduct to the SEC’s attention, but did not have anything more to offer outside of the initially supplied information. The supplied information was generalized, contained errors, and the individual didn’t fully understand the schemes. Furthermore, the individual did report the misconduct to their supervisor but did not notify the SEC for more than two years afterward. The SEC awarded this whistleblower a bounty of $4 million.The SEC recently announced that it has awarded money to two whistleblowers for their information that led to an SEC enforcement action against a company as well as a related action against the same company by another federal agency. Both individuals voluntarily provided critical information that led to the successful enforcement actions. Continue reading

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The SEC recently awarded two whistleblowers a total of $98M for original information they submitted that led to the opening of an investigation and a successful enforcement action involving misconduct. The first whistleblower received the lion’s share of the bounty, which totaled over $87 million. For the second whistleblower, the award totaled over $16 million. Both awards were percentages of the financial sanctions collected in the case, which both included SEC actions as well as another enforcement action by a different federal agency.The SEC recently awarded two whistleblowers a total of $98M for original information they submitted that led to the opening of an investigation and a successful enforcement action involving misconduct.

The first whistleblower received the lion’s share of the bounty, which totaled over $87 million. For the second whistleblower, the award totaled over $16 million. Both awards were percentages of the financial sanctions collected in the case, which both included SEC actions as well as another enforcement action by a different federal agency. Continue reading

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Billionaire investor and founder of Hayman Capital Management, Kyle Bass, succeeded in obtaining a reversal of the SEC's denial of his bid to receive a whistleblower bounty for exposing fraud at United Development Funding (UDF), a Dallas-based land developer.  Bass filed a whistleblower tip regarding UDF to the SEC after one of his analysts found proof that it was a Ponzi scheme. In a surprising move, the SEC overturned its prior denial and awarded Bass $400,000 for providing information that helped the agency secure civil penalties against certain UDF executives.  Notably, this is the first time the SEC has reversed a denial of a whistleblower award.Billionaire investor and founder of Hayman Capital Management, Kyle Bass, succeeded in obtaining a reversal of the SEC’s denial of his bid to receive a whistleblower bounty for exposing fraud at United Development Funding (UDF), a Dallas-based land developer. Bass filed a whistleblower tip regarding UDF to the SEC after one of his analysts found proof that it was a Ponzi scheme. Continue reading

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On June 17, 2024, the U.S. Securities and Exchange Commission (“SEC”) announced a $37 million dollar whistleblower award, marking this the first whistleblower award of 2024. While the Dodd-Frank Act mandates confidentiality regarding the whistleblower's identity and enforcement action, this substantial award underscores the SEC's ongoing commitment to investor protection. Chief of the SEC’s Office of the Whistleblower, Creola Kelly, emphasized, “Today’s award illustrates the importance of the SEC’s whistleblower program, as the whistleblower’s information helped the agency return millions of dollars to harmed investors.”On June 17, 2024, the U.S. Securities and Exchange Commission (SEC) announced a $37 million dollar whistleblower award, marking this the first whistleblower award of 2024. While the Dodd-Frank Act mandates confidentiality regarding the whistleblower’s identity and enforcement action, this substantial award underscores the SEC’s ongoing commitment to investor protection. Continue reading

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The SEC (US Securities and Exchange Commission) has exacting criteria for both submission of whistleblower tips and their issuance of any financial bounties, including the amounts. How SEC Whistleblower Awards Are Determined The general rule for the award amount is 10% to 30% of all monetary fines collected from the entities in question based on a judgment in excess of $1 million. The money is not taken from investor funds. The fines and other civil penalties imposed on and collected from those involved in misconduct goes into the fund that pays the SEC’s whistleblower awards. Occasionally other federal agencies separately offer their own awards in addition to the SEC’s bounties. They are awarded and calculated separately from the SEC’s. The awards are not made automatically, and the whistleblower must submit a claim them once the case is published on the SEC’s website.The SEC (US Securities and Exchange Commission) has exacting criteria for both submission of whistleblower tips and their issuance of any financial bounties, including the amounts.

How SEC Whistleblower Awards Are Determined

The general rule for the award amount is 10% to 30% of all monetary fines collected from the entities in question based on a judgment in excess of $1 million. The money is not taken from investor funds. The fines and other civil penalties imposed on and collected from those involved in misconduct goes into the fund that pays the SEC’s whistleblower awards. Continue reading

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The U.S. Supreme Court has found that a whistleblower is entitled to protection from retaliation under federal law, and not required to show proof or intent from their employers. The Court ruled in favor of whistleblower Trevor Murphy who was awarded $900K in a jury verdict in 2017 after his employer, UBS, unlawfully fired him. The ruling was unanimous. SEC whistleblower attorney Scott Silver commented “This landmark Supreme Court decision will bolster whistleblower rights and protect whistleblower’s from retaliation in the workplace.” The justices then rejected UBS’s claim that Murray was required to show retaliatory intent for whistleblower protection under the Sarbanes-Oxley Act. This act is the law that governs corporate financial reporting and recordkeeping.The U.S. Supreme Court has found that a whistleblower is entitled to protection from retaliation under federal law, and not required to show proof or intent from their employers. The Court ruled in favor of whistleblower Trevor Murphy who was awarded $900K in a jury verdict in 2017 after his employer, UBS, unlawfully fired him. The ruling was unanimous.

SEC whistleblower attorney Scott Silver commented “This landmark Supreme Court decision will bolster whistleblower rights and protect whistleblower’s from retaliation in the workplace.” Continue reading

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The SEC (Securities & Exchange Commission) has filed a summary judgment against two former employees of Bridgewater, NJ-based Synchronoss Technologies, Inc. They are the former CFO, Karen Rosenberger, and the former Synchronoss controller, Joanna Lanni. The two engaged in accounting misconduct that led to the company’s overstatement of revenue. This led to the company meeting revenue expectations that it would not have otherwise. The SEC’s complaint details that Rosenberger aided and abetted the company’s public filing of false financial statements regarding five of Synchronoss’ transactions and engaged in fraud with three of them. The company had to later restate the five transactions. Two of these transactions were with AT&T, one of Synchronoss’s largest customers. Another transaction involved the company’s acquisition of another business.The SEC (Securities & Exchange Commission) has filed a summary judgment against two former employees of Bridgewater, NJ-based Synchronoss Technologies, Inc. They are the former CFO, Karen Rosenberger, and the former Synchronoss controller, Joanna Lanni. The two engaged in accounting misconduct that led to the company’s overstatement of revenue. This led to the company meeting revenue expectations that it would not have otherwise. Continue reading

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