Whistleblower Receives $750,000 Award from SEC
- posted: May 23, 2016
- Whistleblower Litigation
In a recent case, the U.S. Securities and Exchange Commission (SEC) awarded a Winnetka, Illinois man with a $750,000 award for his role in alerting authorities to securities law violations on the New York Stock Exchange.
The man first raised concerns about these violations in 2010. At the time, he had discovered data that he claimed helped explain what happened in the flash crash of May 6, 2010, when $1 trillion was momentarily removed from value on American equities.
So-called flash crashes make it possible for criminals to engage in a scheme known as “spoofing,” a type of high-speed fraud that involves con artists quickly ripping off stock market shareholders in under a few thousandths of a second. One trader from the United Kingdom is accused of helping cause the May 2010 flash crash through spoofing-related activities.
Damage to reputation
When the man made his concerns public, many big-time players in the exchange world accused him of being a conspiracy theorist. It took years for the SEC to begin investigating his claims, and even after the investigation began, it took a full two years before the agency issued a $5 million fine to the New York Stock Exchange — a number the whistleblower says is far too lenient.
Although he does not complain about receiving $750,000 for his role in uncovering the securities violations and says he does feel “vindicated,” he says the reputational damage he suffered to himself and his business was worth far more than the award he received. He says he wishes investigators would have taken him seriously when he first made his concerns about these violations known in 2010.
To learn more about what your company should be doing when it comes to investigating the claims of whistleblowers, speak with a skilled Dallas attorney at Whistleblower Law for Managers.