Who is a Banking and Securities Fraud Whistleblower?

In the last few years, the Justice Department has filed close to 10,000 financial fraud lawsuits involving almost 15,000 defendants. How does the government’s Financial Fraud Enforcement Task Force find out about all of that fraudulent misconduct? Many times, it’s from securities industry insiders who don’t want any part of breaking the law or cheating their customers. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010 established whistleblower programs for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well. The Dodd-Frank Act provides for cash incentives to whistleblowers who voluntarily come forward with information that results in the successful prosecution of securities and commodities violations.

Are You a Potential Financial Fraud Tipster?

Anyone with information of financial fraud can collaborate with the government under the Dodd-Frank Act to stop the misconduct, so long as the whistleblower’s information is unknown to the SEC from any other source and is not derived solely from a governmental investigation, judicial hearing or news media. As a practical matter, the people who are most likely to have such information are those who work in the securities, commodities or financial services industries.

Most types of financial fraud involve one of the following schemes:

  • Market manipulation
  • Insider trading
  • Reporting violations of Financial Accounting Standards Board
  • Ponzi schemes
  • Financial scams aimed at investors
  • Violations of the Foreign Corrupt Practices Act

You might overhear others in the firm planning something that doesn’t seem quite right. It’s rare that a financial fraud scam is the work of just one person. Perhaps you are faced with accounts that just don’t add up. You might be rewarded financially for participating in the scam. Or you could be threatened with your job to turn a blind eye.

Cash Rewards for Whistleblowers Who Supply Crucial Information

It’s not easy to notify the government about misconduct at your own firm, even when you know innocent investors are being hurt. To reward tipsters with the courage to collaborate with the SEC or the CFTC, the Dodd-Frank Act requires the agencies to pay informants cash rewards of ten to thirty percent of any monetary sanctions over $1 million that the government regains due to a whistleblower’s original information.

Working With a Financial Fraud Attorney to Report Fraudulent Scams

To protect their rights under the Dodd-Frank Act, SEC and CFTC whistleblowers generally hire their own lawyer. For the length of the investigation, which sometimes takes years, the SEC fraud lawyer will:

  • research the fraudulent transactions
  • retain financial experts
  • prepare the disclosure form to file with the SEC or CFTC Whistleblower Office
  • coordinate the whistleblower’s interaction with the government and the expert witnesses

Waters & Kraus: Helping Whistleblowers Protect Investors and Themselves

Waters & Kraus, LLP, has a national presence in qui tam litigation and extensive experience fighting fraud against the federal and state governments. Our whistleblower lawyers provide aggressive representation of informants in whistleblower lawsuits involving all types of fraud against financial investors and American taxpayers. To learn more about our securities and commodities fraud practice, or to have a Waters & Kraus attorney review your potential case, email us or call 800.226.9880.

What is Qui Tam?

Under the Federal False Claims Act (FCA), whistleblowers have the power to save taxpayers billions of dollars each year by taking a stand against fraud. The U.S. False Claims Act allows private citizens to file suits on the government’s behalf when the government has been defrauded through any federally funded contract or program. The qui tam provisions of the False Claims Act allow these citizens to recover damages. A number of states and the city of Chicago also have laws similar to the False Claims Act to protect against fraud. To learn more about the different types of fraud … READ MORE

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What are my chances?

That’s the first question everyone asks. The truth is it’s impossible to know. But we can tell you this. Waters Kraus & Paul has what it takes to fight against big corporate interests and win. That’s why we’ve taken more mesothelioma trials to verdict than any other firm. And that’s why we’ve recovered more than $1.3 billion for clients like you. Do you think you have a case? Contact us now to speak with an attorney.

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