Recently, a jury awarded $12 million in a civil case related to the fallout of the Penn State whistleblower scandal. The person awarded the judgment had to file a lawsuit to receive the judgment. In the world of finance, whistleblowers may discover their path to receiving compensation for shedding light on illegal activity to be easier.
Why is this so? The Securities Exchange Commission (SEC) positively does want people to come forward. Additionally, there are SEC whistleblower attorney firms set up to specifically handle this type of representation. Sadly, many people who know about illegal activities in the world of finance do not come forward. No one informed these persons that protections and rewards were written into the law for them via the expansive Dodd-Frank legislation drawn up by Congress and signed into law in 2010.
Some worry about popular Dodd-Frank whistleblower protections being rolled back. After all, there has been talk of repealing aspects of the Dodd-Frank legislation. The idea Congress would repeal any sections that deal with whistleblower protections would be balmy. Legislators do realize that law enforcement and regulating agencies do need to entice those who might be worried or scared about coming forward with information. The reward clause in the legislation is positive sure to help with this cause.
Rewards have been in the millions. Since there are privacy issues with the levying of fines, the sanctions do not receive the same amount of news coverage as would be the case with a high-profile civil suit. One press release about a whistleblower judgment revealed the unknown citizen received well over $15 million for his or her work. That means the full fine levied against the financial entity was in the tens of millions of dollars. Clearly, the entity was involved with doing something seriously wrong.
The high-volume of money directed towards whistleblowers is telling. The reason whistleblowing is so important in the financial world is whistleblowers have the potential to protect those who may be scammed or harmed by hedge fund managers and others who do not have the clients’ best interests at heart. Whistleblowers may even be completely self-serving in their motivations. Honestly, this is fine. Anyone can choose to do what they wish for whatever reason. In the end, if the decision to blow the whistle helps others, then something good has been achieved.