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 reports were largely ignored by the government.
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 reward whistleblowers for “tips” that lead to sanctions.
These programs have been massively successful, in a very short amount of time. Since 2012, the SEC and CFTC whistleblower programs have recovered billions in sanctions and have paid hundreds of millions in rewards to dozens of whistleblowers. Importantly, both Commissions have implemented robust provisions that protect whistleblowers from retaliation by their employers.
Mehri & Skalet’s experienced whistleblower lawyers have represented numerous whistleblowers under the Dodd-Frank law. If you are aware of frauds or other violations in the securities and/or commodities markets and would like to discuss your options, contact M&S now.