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Despite the slowing down of markets due to the COVID-19 pandemic, April 2020 has been a prolific month for the Securities Exchange Commission. The agency’s Office of the Whistleblower has announced a $27 million award followed by a $5 million award.
Upon the announcement of the $27 million award, the agency hailed it as a milestone for its whistleblower program, which brought the total amount of SEC whistleblower awards “over the $400 million mark.” Up until April 20th,...

Blowing the Whistle About Fraud in The Finance Sector

In spite of a legal framework that vows to encourage transparency, securities and commodities trading fraud are rampant in the U.S. In order to deter fraudsters and protect investors, the Securities and Exchange Commission and the Commodity Futures Trading Commission have both established whistleblower programs.

In the wake of the 2008 crisis, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act enhancing the CFTC’s “regulatory authority to oversee the more than $400 trillion swaps market,” and allowing the SEC to exert more control over financial products and corporate governance and disclosure, improving consumer protections and transparency.

Dodd-Frank also gave rise to the above-mentioned whistleblower programs. The 2010 Act established that the CFTC would pay an award to eligible whistleblowers “who voluntarily provide the Commission with original information about a violation of the CEA that leads to the successful enforcement of a covered judicial or administrative action, or a related action.” On the other hand, retaliation against tipsters who provide information about potential violations is strictly forbidden....