In 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) were authorized to create programs to reward whistleblowers who expose significant frauds on the securities and commodities marketplaces. At that time, the country was still reeling from the multi-billion dollar ponzi schemes perpetrated by Bernie Madoff, Allen Stanford, and others – schemes multiple whistleblowers had tried to expose, but whose report.
Under these programs, individuals who alert the SEC or CFTC to significant regulatory violations (resulting in sanctions of at least $1 million), are now eligible for financial rewards of between 10% and 30% of the sanction. The SEC and CFTC do not require whistleblowers to file any lawsuits and even rewards whistleblowers for “tips” that lead to sanctions.
These programs have been massively successful, in a very short amount of time. Since 2012, the SEC whistleblower program has recovered well over $1 billion and has paid more than $325 million to about 60 whistleblowers. During that same period, the CFTC Program has paid tens of millions of dollars to whistleblowers. Importantly, both Commissions have implemented
robust provisions that protect whistleblowers from retaliation by their employers.
At Mehri & Skalet, our experienced attorneys have represented numerous whistleblowers under the Dodd-Frank law. If you are aware of frauds in the securities and/or commodities markets and would like to discuss your options, contact M&S now.