Securities Fraud

SEC Whistleblower Rewards Program

The SEC whistleblower rewards program provides monetary incentives to individuals who submit information that leads to a successful enforcement action.

SEC whistleblower reward program, established in 2010 under the Dodd Frank Act, pays whistleblower awards to eligible individuals who voluntarily provide the Securities and Exchange Commission (SEC) with original information on violations of the Commodity Exchange Act that leads to a successful enforcement action resulting in monetary sanctions exceeding $1,000,000. The range for awards is between 10 and 30 percent of the money collected.

The Dodd Frank Act is meant to preserve the integrity of the United States’ capital markets and promote financial stability by improving accountability and transparency. During the Dodd-Frank rule making process, Kohn, Kohn and Colapinto’s partners worked closely with the SEC to create an effective whistleblower program.

Dodd Frank Whistleblower Protection Services

Kohn, Kohn & Colapinto’s partners met personally with each of the five SEC Commissioners and presented detailed reports and proposals setting forth rules that were essential to make the law work for Dodd-Frank whistleblowers as intended by Congress. The SEC adopted the key recommendations for enhancing its Whistleblower Reward Program advocated by KKC partners. The following two proposals were adopted by the SEC: establishing the right of corporate compliance officials and directors to obtain rewards; and ensuring that employees who “participated” in a fraud but did not “plan and initiate” the fraud, could obtain rewards.

Securities Fraud includes: insider trading; “Ponzi” schemes; accounting fraud; and “front running,” which means a trader knows of a pending customer order for a security and buys or sells from his or her own account to make an unlawful profit.

If you would like to learn more about how to report securities fraud or violations of securities laws under the SEC whistleblower program, please contact Kohn, Kohn & Colapinto to discuss the matter at no charge.