SEC Is Encouraging Whistleblowers To Report Any Instances Of financial Fraud
In the past, the United States has experienced numerous financial frauds committed by investment bankers and financial institutions in the past. These fraudulent individuals use their positions to enrich themselves while the public suffers from the economic problems created thereof. In order to resolve this issue, the Securities and Exchange Commission (SEC) was established. The office is charged with the responsibility of investigating and recovering funds lost through fraudulent activities.
When SEC was formed, its main challenge was identifying individuals who were breaking federal securities laws. It needed to rely on whistleblowers in order to accelerate the process of identifying criminals and investigating them. However, the laws that existed at the time did not provide the secure platform where this exercise could be done. To this end, the office teamed up with Dodd Frank-Frank to sponsor a bill to the Congress.
In 2010, the Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new law brought several changes on how the United State’s financial industry could be regulated. Through the Act, the SEC was able to establish a new whistleblower program. This new program has numerous incentives that have resulted to an increase in the number of people coming out and reporting financial frauds to the SEC. The SEC has in turn been able to prosecute many individuals besides recovering some of the wrongfully gained funds.
The program has three main incentives: employment security, money and privacy. The Dodd-Frank Act provides all financial whistleblowers with job protection. Unlike in the past when whistleblowers could lose their jobs if their employers discover them, the current law ensures that companies respect whistleblowers. Secondly, whistleblowers enjoy monetary benefits. They are awarded 10-30% of all money recovered by the SEC if the amount sanctioned is more than $1 million. This rule applies to funds recovered by other law enforcers using the information provided by the whistleblower.
Whistleblowers have the option of providing the information anonymously. This incentive is important to individuals who fear for their personal safety and that of their family members. With this option, a whistleblower can use the services of a SEC Whistleblower attorney to report fraudulent activity. The lawyer will then act as a link between the individual and the SEC. Extra measures are taken by the SEC Whistleblower attorney to ensure that the client remains anonymous and that he or she enjoys the full protection of the law, in case his or her identity is revealed. The above incentives have completely transformed the confidence of whistleblowers. This information was originally reported on SEC Whistleblower Advocate’s website as seen in this link http://www.secwhistlebloweradvocate.com/program/program-overview