Posts Tagged ‘SEC whistleblower’
Sunday, May 6th, 2012
In a recent article entitled “Source’s Cover Blown by the SEC,” the Wall Street Journal claimed that the SEC “inadvertently revealed the identity of a whistleblower.” The alleged disclosure occurred during the SEC’s investigation of Pipeline Trading Systems LLC. According to the article, an SEC lawyer “showed an executive who was being questioned a notebook from the whistleblower filled with jottings about trades, calls and meetings.” From that notebook, the executive claims he recognized the handwriting as that of Peter Earle, who happened to be the whistleblower who prompted the SEC’s investigation.
In a scathing response to the Journal’s story, the SEC disputes the allegations against it. In stark contrast to the story told by the Journal, the SEC asserted that it “in no way exposed Peter Earle as a whistleblower.” In fact, the Commission claims that the use of the notebook was neither “inadvertent” nor a “breach.” Instead, it was a “deliberate decision,” discussed by an SEC lawyer and his supervisor prior to the deposition in which the notebook was exhibited.
Going further, the SEC strongly disagrees with the allegation that the use of the notebooks in no way comprised Mr. Earle’s identity. According to the SEC, “it was widely known…that, after the termination of his employment in 2009, Mr. Earle had approached the SEC – a fact volunteered by witnesses and acknowledged by Mr. Earle long before the exhibition of his notebooks in November 2010.” Yet, despite this knowledge, the SEC maintains that, throughout the investigation, the Commission treated his status as a cooperating witness as confidential. There was “nothing about the notes…or about the SEC’s use of them as exhibits…that revealed anything about whether Mr. Earle or others were cooperating in the SEC’s investigation.”
If you have knowledge of Securities Fraud and would like to discuss the possibility of a whistleblower award under the SEC whistleblower program, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, including your ability to remain anonymous in filing for an award, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Wednesday, March 21st, 2012
The SEC’s new whistleblower award program is already making an impact, as many insiders are coming forward with investigative leads, hoping to cash in on the program.
The SEC whistleblower program allows individuals who present original information that leads an enforcement action resulting in monetary sanctions of over $1 million to collect an award. The award may range from 10-30%, depending on factors such as the significance of the information. Whistleblowers range from current insiders, former employees, and outside observers.
The SEC vets the tips through its market intelligence unit, which is comprised of nearly fifty attorneys. Potentially good leads are then funneled to enforcement attorneys.
SEC officials have recently commented that the quality of the tips received is surprisingly high, and some have resulted in “huge cases.”
According to the Financial Times, some insiders are taking on the role of detective. Recently, due to concerns with a deal on which he had worked, a company insider submitted a tip to the SEC. That tip resulted in an internal investigation and an SEC inquiry, which uncovered other problematic deals by the targeted company.
“In the stock market we’ve had good intel simply because of the surveillance by self-regulatory organizations and the firms themselves,” says Thomas Sporkin, head of the SEC’s market intelligence unit. “This program similarly provides a set of eyes and ears on the corporate side,” he said.
To read more about the SEC turning whistleblower tips into cases, see the full Financial Times article at http://www.ft.com/intl/cms/s/0/15e5a89c-6a27-11e1-b54f-00144feabdc0.html?ftcamp=published_links/rss/companies_us/feed//product#axzz1pl9KTUK8.
If you have knowledge of Securities Fraud or Corporate Fraud and would like to discuss the possibility of a whistleblower award under the SEC whistleblower program, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Wednesday, May 4th, 2011
A long time corporate investigator recently shared his concern that whistleblowers look to corporate investigators and attorneys for help and protection when they blow the whistle. Nothing could be further from the truth. “There’s nothing I can do,” said the investigator. “I’ve seen it over and over again. They are going to get their heads cut off.”
The investigator said he knew that whistleblowers, no matter the merit of their report, would be skillfully and systematically terminated with a substantial paper trail to support management’s actions.
“They look to me for help,” he said. “I work for the company. I tell them that, but they don’t seem to understand.”
Neither did CEO Ian Norris of Morgan Crucible Company. Morgan Crucible came under government investigation for an international price fixing conspiracy. CEO Norris began a campaign to obstruct a grand jury investigation, and he shared details of his campaign with Morgan Crucible’s attorney. When the government learned of Norris’s obstruction, it charged Norris with corruptly persuading, and attempting and conspiring to corruptly persuade, others with intent to influence their testimony in grand jury proceedings. Morgan Crucible waived its attorney client privilege and granted permission for corporate counsel to testify. Norris fought the testimony, saying the corporate attorney also represented Norris in his individual capacity and was prohibited from testifying.
The Third Circuit disagreed, but found that communications about scope of representation were ambiguous. Ultimately, the court ruled that Morgan Crucible, alone, held the right to waive attorney client privilege, and the attorney testified.
The attorney testified that Norris, in front of counsel, disseminated a false cover story and scripts about the price fixing and encouraged everyone, including counsel, to relay the false information to investigators. The attorney said he did not know the information was false.
Attorneys and investigators should provide employees with explicit explanations about their role in investigating allegations of fraud within a corporation. They often do not, for a variety of reasons. Bottom line – employees need to take steps to protect themselves when they report corporate misconduct internally.
For a free consult about whether you have a potential government fraud claim, call K&M today.
Tags: abuse, attorney general, corporate fraud, corruption, False claims, False Claims Act, FCA, FERA, fraud, fraud reward, government fraud, health care fraud, IRS whistleblower, IRS whistleblower program, medicare fraud, pharmaceutical fraud, Qui Tam, retaliate, retaliation, SEC whistleblower, Tax cheat, tax evasion, Tax Fraud, tax whistleblower, whistle blowing, whistleblower award, whistleblowing, wrongful termination
Posted in Corporate Tax Fraud, Employment Tax Fraud, False Claims Act, Money Laundering Tax Fraud, Offshore Accouts Fraud, retaliation, SEC Whistleblower Program, Tax Fraud, Uncategorized, Whistleblower Protection | Comments Off
Thursday, April 28th, 2011
The SEC has postponed adoption of rules for its whistleblower program. According to the Dodd-Frank Act, final regulations for the whistleblower program were to be adopted by the SEC no later than April 21, 2011. Earlier this week, the SEC announced on its website that it is planning to adopt new rules some time between May and end of July. SEC spokesperson John Nester did not provide any specifics about the delay, commenting only that the SEC was crafting all the new rules for Dodd-Frank with an emphasis on “getting it right.”
The financial industry needs an effective fast-track incentive program for whistleblowers. The Dodd-Frank program augments the SEC’s 40 year old insider trading reward program that never realized its potential as a decentralized fraud enforcement mechanism. The SEC, under the old insider trading program, only paid out awards to whistleblowers four times. SEC watchers generally discount the insider trading program and are skeptical about the SEC’s interest in working with whistleblowers in general.
The new Dodd-Frank whistleblower program has generated considerable interest among would be whistleblowers and large companies. Frustrated employees and fraud fighters are delighted to have another program that incentivizes whistleblowers; large companies criticize the program because it encourages whistleblowers to report fraud directly to the government, bypassing internal corporate compliance procedures.
Whistleblowers could file SEC claims for rewards under the Dodd-Frank Act as of last July but will be expected to comply with the new rules once the new rules are adopted. Kenney & McCafferty, P.C. is happy to assist you in assessing your potential SEC whistleblower claim. Call K&M for a free consultation today
Tags: bank fraud award, banking whistleblower, banking whistleblower award, corporate fraud, corporate fraud whistleblower, corporate whistleblower award, finance industry fraud, market fraud, market fraud whistleblower, market whistleblower award, mortgage fraud, mortgage fraud whistleblower, mortgage whistleblower award, Sarbanes Oxley award, Sarbanes Oxley violation, Sarbanes Oxley whistleblower, Sarbanes Oxley whistleblower award, SEC whistleblower, SEC whistleblower award, SEC Whistleblower Program, SEC whistleblower reward, securities violations, securities violations reward, securities whistleblower, securities whistleblower award, SOX retaliation, SOX whistleblower, SOX whistleblower award, whistleblower
Posted in retaliation, SEC Whistleblower Program, Uncategorized, Whistleblower Protection | Comments Off
Tuesday, February 15th, 2011
February 15, Galileo’s birthday, is a fitting time to reflect upon Galileo’s experience with blowing the whistle on the Ptolemaic theory, the long held belief that the Earth was the center of the universe and that the sun and the planets orbited the Earth. Galileo today is called “the father of modern observational astronomy” and “the father of modern physics.” Stephen Hawking stated, “Galileo, perhaps more than any other single person, was responsible for the birth of modern science.” Most people don’t realize that Galileo was tried by the Inquisition for his advocacy of Copernicanism, found guilty of heresy, and spent the rest of his life under house arrest.
As brilliant he was, Galileo did not understand the environment in which he was operating, and he failed to adhere to rules and constraints placed on those attempting to advance scientific theories in the 1600s. His support of heliocentrism offended the Catholic church. The church admonished Galileo, who thought he would be clever and work around the constraints that had been placed on him. After being chastised, Galileo waited years to publish Dialogue Concerning Two Chief World Systems, but he didn’t follow the rules. To publish, he needed papal permission and formal authorization from the Inquisition. He didn’t get them. Had he followed the rules, Galileo probably could have avoided trial and arrest. Instead, Galileo was:
* Found “vehemently suspect” of heresy.
* Sentenced to formal imprisonment, which was later commuted to house arrest.
* Had his publication, Dialogue, banned.
* Forbidden to ever publish again.
After his death, the world eventually lauded his contributions, but Galileo died without acclaim and in isolation.
Whistleblowers should learn from Galileo’s mistakes. No matter how brilliant a whistleblower may be, it is impossible for everyone to know everything. There is no substitute for experienced legal advice when one decides to blow the whistle. Galileo originally had many supporters who could have guided him the intricacies of the papacy’s rules for publication. He didn’t ask, and he thought he had the situation well in hand. He was wrong.
If Galileo could not figure out how to maneuver through the intricacies of successfully blowing the whistle, who can? Fortunately, whistleblowers today have Kenney & McCafferty to call for expert advice. Whistleblowers should educate themselves on the pros and cons before blowing the whistle. If you want to report fraud against the government, save yourself some headaches. Get a free consultation by calling Kenney & McCafferty today.
Tags: abuse, corporate fraud, corruption, ecurities violations, False Claims Act, FCA, fraud, fraud reward, government fraud, health care fraud, pharmaceutical fraud, Qui Tam, retaliate, retaliation, SEC whistleblower, tax claims, tax evasion, Tax Fraud, tax whistleblower, waste, whistle blower, whistle blowing, whistleblower, whistleblowing, wrongful termination
Posted in Abusive Tax Shelters, Corporate Tax Fraud, Employment Tax Fraud, False Claims Act, IRS Whistleblower Office, Money Laundering Tax Fraud, Offshore Accouts Fraud, retaliation, SEC Whistleblower Program, Tax Fraud, Uncategorized | Comments Off