The US Securities and Exchange Commission has awarded two whistleblowers almost $50M and another over $33M in the largest whistleblower awards that the regulator has issued to date. This ups the total of SEC whistleblower awards granted to $262M to 53 individuals in the last six years.
According to the SEC Office of the Whistleblower Chief Jane Norberg, these latest awards show that whistleblowers can offer information that is “incredibly significant,” making it possible for the regulator to go after serious violations that could have gone “unnoticed. “ Until these latest awards, the largest SEC whistleblower award granted was $30M in 2014.
Whistleblowers who provide quality, unique information involving securities law violations that lead to a successful enforcement action rendering over $1M in monetary sanctions may be eligible to receive an award that is 10-30% of the funds collected.
According to The Wall Street Journal, these awards to the three whistleblowers are for individuals that helped the SEC arrive at a $415M settlement with Bank of America Corp. (BAC) in 2016. As part of the settlement, the regulator’s largest ever against a Wall Street bank, BofA settled allegations that it inappropriately used customer funds and securities to make money while risking billions of dollars in customer assets. This included a number of complex trades between ’09 and’ ’12 that the SEC contends were done to enhance profits while artificially lowering Bank of America’s walled- off deposits.
The WSJ, in 2015, reported on billions of dollars of loans that were given to customers brought in specifically for said loans. Bank of America unit Merrill Lynch was involved in executing these “leveraged conversions” so that the bank could lower its reserves that were kept in lockup accounts. Securities laws mandate that there be a minimum in lockup amounts maintained in case an emergency arises and customers need to get paid. However, critics have referred to these Merrill trades as bogus profits and loss.
When settling with the SEC, Bank of America admitted to wrongdoing while maintaining that no customers were hurt and there were no losses that resulted. The bank said that remedies have been made to resolve the issues that led to the settlement.
SEC Whistleblowers
The SEC is committed to protecting the identity of whistleblowers so as to avoid retaliation, which is why the regulator keeps details of cases involving whistleblowers confidential. Unfortunately, whistleblowers have been known to be subject to wrongful termination, demotions, and harassment on the job. It is important that you retain the services of a securities law firm that can protect your rights as a whistleblower, including making sure that you receive the award to which you may be entitled. This is not the type of case you want to pursue without an experience securities law firm representing you.
The SSEK Partners Group is a securities fraud law firm. We represent high net worth individual investors and institutional investors. Over the years, we have helped thousands in recouping their investment fraud losses. All inquiries are confidential. Your initial consultation with is a free, no obligation session so that we can help you explore your legal options and determine whether you have grounds for a case.
The SEC Order in the Whistleblower Case (PDF)
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CFTC to Pay $30M to Whistleblower in $367M Asset Management Case Against JPMorgan, Institutional Investor Securities Blog, February 20, 2018
UBS Group Ordered to Pay Former CMBS Strategist Turned Whistleblower $903K, Institutional Investor Securities Blog, December 20, 2017
Massachusetts Investigates Wells Fargo Advisers, Stockbroker Fraud Blog, March 16, 2018