Financial Fraud

Financial fraud is any act that causes people to purchase or sell a stock based on false or misleading information or violate securities laws. Whistleblowers may report many different types of securities fraud, from outright embezzlement to sophisticated stock market manipulation infringing the rules created to protect investors and the general public.

What is a Financial Fraud?

Financial and securities fraud directly harms investors and companies in the public and private sectors by manipulating stock prices. Today it is estimated that malicious schemes cost the markets between $10‐40 billion annually. Those who illegally manipulate buy and sell prices affect all the 200 million individuals who trusted their savings in this type of investment, and directly or indirectly rely on them through their pension funds and retirement accounts.

These mischievous scams reached a peak in 2008 when the subprime mortgage crisis sent the global market into recession, taking a heavy toll on U.S. economy. Americans lost much in term of monetary and human resources as millions of dollars and jobs got lost in a very short period of time. In response to this utterly devastating market crash, in 2010 the Congress passed the Dodd‐Frank Wall Street Reform and Consumer Protection Act. The Dodd‐Frank Act (DFA) introduced comprehensive regulatory changes and consumer protection tools to the U.S. financial system. One of the Act’s primary objectives was to detect potential fraudulent behaviors by incentivizing individuals to report illegal activity through whistleblowing. The Act created the SEC Whistleblower Office which granted protection, full anonymity, and large monetary rewards to all relators that help the Government bring these criminals to justice.

Overview and Examples

There are several types of SEC fraud that can be recovered under the DFA, IRS Whistleblower Statute, and False Claims Act. Although usually only employees are in a position to identify an ongoing scheme (insiders), anyone with credible information can report it, including third ­parties who uncover illegal activities through independent investigation. Some examples of these unlawful practices include:

Securities Fraud Under The SEC Whistleblower Program

To date, banks and other financial institutions continue to operate with little effective government oversight. The U.S. government has increasingly relied on whistleblowers to help detect and prosecute fraud, and created several programs and legislation to ensure they would be handsomely rewarded. With the current legislation, an attorney can be hired to file a SEC claim anonymously and, if the case is successful, receive a monetary award based on the money recovered by the authorities. The percentage ranges from 10 to 30 percent of the monies collected based on the information provided (so it may reach up to several millions of dollars), with a minimum payment of $100,000.

Learn more about the SEC Whistleblower Program

How to report a financial fraud

Blowing the whistle to expose SEC fraud is critical to the maintain our country economic stability and prosperity. Fair and free stock markets are the foundation of our financial system. The programs passed by the Government ensured that the career of future Bernard Madoff can be stopped before it even begins.

Take the next step, and assist our team in fighting this battle for justice. We can help you report any type of fraud by guaranteeing you complete anonymity. Contact us now by filling out a form or calling toll-free at 1-800-681-3228. 

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