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SEC Issues $3.8 Million Whistleblower Award in Fraud Case

In July, the U.S. Securities and Exchange Commission (SEC) issued a $3.8 million award to a whistleblower who assisted the commission by providing crucial information during an ongoing investigation into a fraudulent scheme.

According to the press release the SEC put out to announce the award, the whistleblower provided the agency with information that “helped the Commission halt an ongoing fraud and return millions of dollars to harmed investors.”

This award is notable because it is a reminder that SEC whistleblowers can assist with existing investigations to be eligible for an award—the unique information they provide to investigators does not necessarily have to be about an entirely new case.

SEC whistleblower program still going strong

The whistleblower program had its 10-year anniversary this summer, as the Dodd-Frank Act which established whistleblower reward programs within the SEC and CFTC was passed in 2010. Since the SEC handed out its first whistleblower award in 2012, it has issued more than $505 million in whistleblower awards, and ordered more than $2.5 billion in financial remedies based on information provided by those whistleblowers, including $1.4 billion in disgorgement and prejudgment interest.

Whistleblowers who voluntarily submit original information are eligible for awards of anywhere from 10 to 30 percent of the resulting sanction money so long as that information significantly contributes to the investigation and enforcement action. The term “significantly contribute” means the information:

  • Helps the SEC bring the enforcement action in much less time or by using much less resources than would otherwise occur
  • Expands the scope of an existing investigation, or
  • Allows the SEC to bring claims against other parties

For more information about how to proceed with filing an SEC whistleblower complaint, contact an experienced attorney at Kardell Law Group.

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In his new book, "Standing Up to China: How a Whistleblower Risked Everything for His Country," former client & Author, Ashley Yablon, quotes Attorney Steve Kardell about Whistelblower Law.
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Incredible knowledge of employee related concerns and equally brilliant knowledge of health care regulations, standards of practice. I would recommend this firm to anyone."  -V.B.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

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