ATTORNEY NEWSLETTER
SEC Whistleblower Program Awards
The Securities and Exchange commission has just doled out it’s second-largest award ever, a whopping $17 million, to a Wall Street employee who provided insider information that helped advance an SEC investigation. Due to the nature of the investigation and the anonymity of the whistleblower, it’s impossible to say exactly what the investigation was looking into, but it’s fair to say that it resulted in a sizeable recoup for the federal government. Whistleblowers are generally awarded between 10 and 30% of the amount that the SEC recovers above $1,000,000, meaning that the SEC recovered somewhere between $50 and $170 million.
The federal governments relationship with whistleblowers dates back to the Civil War, when they passed the False Claims Act, designed to reward citizens who would alert them to fraud carried out against the government. At the time, the major target of fraud was the Union Army, but since the rise of Medicare and Medicaid, healthcare providers and contractors are the most prolific defendants in qui tam suits. Qui tam lawsuits are filed by private citizens on behalf of the government, and they get to keep a percentage of the recovery. Our San Francisco whistleblower attorneys have helped our clients navigate the qui tam process on a number of occasions. Depending on the size and importance of the case, the federal government may decide to assume control of the case itself, and still award a percentage to the whistleblower.
The SEC, instead of investigation fraud carried out against the government, looks into fraud carried out by companies against their investors. The SEC launches its own investigations based on tips provided by whistleblowers, and isn’t involved in qui tam cases. Instead, whistleblowers provide information directly to the agency, usually relating to illegal or fraudulent business practices, and the SEC uses the information to further their case. The whistleblower’s identity is kept secret, and often much of the information in the case is filed under seal, so that only the parties in the case can see the financial information and business practices of the company.
If you believe that you may have information about fraud carried out by a company against investors or the government, contact the Evans Law Firm at (415) 411-8669, or by email at info@evanslaw.com. Our San Francisco whistleblower attorneys have experience dealing with government investigators from the SEC, IRS, and other agencies, as well as shepherding a case through the qui tam and whistleblower process.
