Securities and Commodities Fraud Topics | Behn & Wyetzner, Chartered

CFTC Proposes New Rules to Strengthen Its Whistleblower Program

January 4, 2017

The U.S. Commodity Futures Trading Commission (CFTC) is poised what does it mean to be a qui tam relator to adopt new rules and regulations that will improve the transparency of its whistleblower program while also bolstering protections for whistleblowers. The proposed amendments will also make the CFTC’s program more consistent with the SEC’s whistleblower program, which has already implemented similar rules and regulations.

“Since the whistleblower program was established in 2011, the need for certain improvements has become apparent,” the CFTC stated. By giving whistleblowers “greater clarity about the claims and awards process and greater assurance that retaliation would not be tolerated,” the CFTC believes the proposed rules will “encourage whistleblowers to step forward.”

[Read more…]

SEC Whistleblower Program Posts Record Year

December 14, 2016

The SEC’s whistleblower program paid out a record $57 million to Medicaid Beneficiary Supreme Court Case - Behn & Wyetzner whistleblowers in Fiscal Year 2016. That figure is higher than all previous awards issued through the SEC whistleblower program combined.

According to the agency’s 2016 annual report to Congress, available here, the Office of the Whistleblower received over 4,200 tips and enforcement actions led to $584 million in financial sanctions. The number of tips the office received reflects a 40% increase over FY 2012, the first year the office recorded full-year data. According to the report, the increase in tips is due in large part to the growing awareness of the whistleblower program.

[Read more…]

Higher Penalties, Sentences Imposed in Qui Tam Whistleblower Cases

March 5, 2015

Support for Qui Tam Whistleblowers Programs | Behn & Wyetzner According to a recent study published by Andrew C. Hall, Gerald S. Martin, Nathan Y. Sharp and Jaron H. Wilde, when qui tam whistleblowers participate in financial misrepresentation enforcement actions, the wrongdoers face significantly increased penalties and prison time.

The study’s authors analyzed over a thousand qui tam financial fraud enforcement actions between 1978 and 2012 and determined 145 cases (almost 13% of the total) involved whistleblower information. Due to whistleblowers’ assistance, the government obtained an additional $20.75 to $21.27 billion in judgments, the study estimates. Prison sentences for guilty corporate executives and managers also increased by roughly two years when qui tam whistleblowers were linked with the enforcement action. [Read more…]

SEC Division of Enforcement Breaks Record in Judgements Obtained

February 4, 2015

Record Number of Judgements for SEC Division of Enforcement | Behn & Wyetzner The SEC Division of Enforcement recently released its fiscal year 2016 budget request, providing a detailed account of the Division’s activities during FY 2014 as well as an estimated budget for upcoming years.

Of particular note, the Division set a record by obtaining judgments worth more than $4.16 billion in disgorgement and penalties. The Office of the Whistleblower received approximately 3,600 leads from whistleblowers (more tips than ever before), made the largest number of awards, and announced its largest single award ever to an individual ($30 million). During the same time period, the Division’s total costs came in around $455 million. Thus, for every dollar spent, the Division returned more than nine times that amount.

[Read more…]