Financial Audit Fraud Can Be The Basis of SEC Bounty Actions That Pay Large Financial Reward to Whistleblowers That Properly Expose Shareholder Fraud, Insider Trading, and Other Violations of Securities Law by Financial Audit Fraud Whistleblower Reward Lawyer and Financial Audit Fraud Bounty Action Lawyer Jason Coomer
The SEC and CFTC are offering large financial bounties to financial professionals who anonymously expose financial audit fraud, accounting fraud, and other violations of securities law. Financial audits and financial reporting are crucial for investors and the financial markets. As such, the SEC and CFTC are seeking auditors, accountants, and other professionals with original information of significant and ongoing fraud. These individuals typically have access to specialized information regarding illegal conduct and under special rules can report this specialized information anonymously to the SEC or CFTC and recover large financial rewards. If you want to confidentially explore a potential anonymous bounty action, please feel free to contact Confidential Financial Audit Fraud Whistleblower Reward Lawyer and Securities Fraud Bounty Action Lawyer Jason Coomer via e-mail message or use our submission form.
Financial Professional Whistleblowers Can Protect Their Identity and Career by Contacting a Confidential Insider Trade Whistleblower Lawyer, Confidential Securities Fraud Whistleblower Lawyer, or Confidential Financial Professional Whistleblower Lawyer Prior to Reporting Insider Trades and other Securities Fraud
For many financial professionals, it can be a difficult decision to step forward to expose executive insider trades, hedge fund insider trades, private equity fund fraud, false misleading information on a company's financial statements, false information on Securities and Exchange Commission (SEC) filings, stock manipulation schemes; embezzlement by stockbrokers; and other securities fraud. To protect these professionals, confidentiality safeguards have been put in place that allow the financial professional whistleblower to blow the whistle on securities fraud through an attorney. By contacting a bounty action lawyer, the financial professional can protect their identity and career as well as identify any potential issues with a potential bounty action. As a Financial Audit Fraud Whistleblower Reward Lawyer, Jason S. Coomer commonly works with high level professionals and other lawyers to confidentially review large whistleblower reward lawsuits. To begin a review of such a lawsuit, please make sure any and all materials are submitted from a secure e-mail address and connection as well as a secure e-mail address and phone number are provided.
Bounty Actions Allow Auditors, Accountants, Compliance Officers, and Other Professionals With Specialized Information of Ongoing Fraud to Anonymously Report Illegal Conduct and Receive Large Financial Rewards
The SEC and CFTC regulate the financial markets in the United States. As such, they want to detect fraud and illegal conduct in these markets. For this reason both agencies have rules in place that protect and encourage whistleblowers to expose signficant ongoing fraud and illegal conduct. More specifically, both agencies want to know about false financial reports and audits that have been given to the SEC, the CFTC, or investors. For this reason, both agencies offers financial rewards to financial professionals who anonymously expose audit fraud, reporting fraud, insider trading, and other forms of investment fraud. These large financial rewards can be obtained by financial professionals who anonymously expose fraud schemes through a lawyer. These professionals can also obtain confidential reviews of their cases as well as help preparing their evidence to submit to the SEC or CFTC by contacting a financial audit fraud bounty action lawyer. Further, because of the special role of auditors, accountants, compliance officers, lawyers, and other types of some whistleblowers, it is important to understand rules regarding their reporting of illegal conduct as well as handling evidence issues.
The SEC Enforcement’s Insider Trading Program
Insider trading has long been a high priority for the Commission. Approximately eight percent of the 650 average annual number of enforcement cases filed by the Commission in the past decade have been for insider trading violations. In the past two years, the Commission has been particularly active in this area. In fiscal year 2010, the SEC brought 53 insider trading cases against 138 individuals and entities, a 43 percent increase in the number of filed cases from the prior fiscal year. This past fiscal year, the Commission filed 57 actions against 124 individuals and entities, a nearly 8 percent increase over the number of filed cases in fiscal year 2010.
The increased number of insider trading cases has been matched by an increase in the quality and significance of our recent cases. In fiscal year 2011 and the early part of fiscal year 2012, the SEC obtained judgments in 18 actions arising out of its investigation of Galleon hedge fund founder Raj Rajaratnam, including a record $92.8 million civil penalty against Rajaratnam personally. The SEC also discovered and developed information that ultimately led to criminal convictions of Rajaratnam and others, including corporate executives and hedge fund managers, for rampant insider trading. In addition, we recently filed an insider trading action against Rajat Gupta, a former director of both Goldman Sachs and Procter & Gamble, whom we allege provided confidential Board information about both companies’ quarterly earnings and about an impending $5 billion Berkshire Hathaway investment in Goldman Sachs to Rajaratnam, who traded on that information.
Insider Trading Can Be The Basis of SEC Bounty Actions
There are two principal theories under which the SEC prosecutes insider trading cases under Section 10(b) and Rule 10b-5. The “classical theory” applies to corporate insiders – officers, directors, and employees of a corporation, as well as “temporary” insiders, such as attorneys, accountants, and consultants to the corporation.6 Under the “classical theory” of insider trading liability, a corporate insider violates Section 10(b) and Rule 10b-5 when he or she trades in the securities of the corporation on the basis of material, nonpublic information. Trading on such information qualifies as a “deceptive device” under Section 10(b), because “a relationship of trust and confidence [exists] between the shareholders of a corporation and those insiders who have obtained confidential information by reason of their position with that corporation.”7 That relationship “gives rise to a duty to disclose [or to abstain from trading] because of the ‘necessity of preventing a corporate insider from . . . tak[ing] unfair advantage of . . . uninformed . . . stockholders.’”
The Supreme Court has recognized that corporate “outsiders” can also be liable for insider trading under the “misappropriation theory.”9 Under this theory, a person commits fraud “in connection with” a securities transaction, and thereby violates Section 10(b) and Rule 10b–5, when he or she misappropriates confidential and material information for securities trading purposes, in breach of a duty owed to the source of the information. This is because “a fiduciary's undisclosed, self-serving use of a principal's information to purchase or sell securities, in breach of a duty of loyalty and confidentiality, defrauds the principal of the exclusive use of that information.” The misappropriation theory thus “premises liability on a fiduciary-turned-trader's deception of those who entrusted him with access to confidential information.” Under either the classical or misappropriation theory, a person can also be held liable for “tipping” material, nonpublic information to others who trade, and a “tippee” can be held liable for trading on such information.
Communication of nonpublic information to others who either trade on the information themselves or share it with others for securities trading purposes, could be analyzed under the case law relating to tipper and tippee liability and also would turn on the specific facts of the case.
A person can be liable as a tipper where he or she discloses information in breach of a fiduciary duty or other similar duty of trust or confidence and the tippee trades on the basis of that information. The same duty requirement described above is applicable in the tipper context, as are the requirements that the tipped information be nonpublic and material. In addition, a court may require a showing that the Member of Congress or staff member personally benefited from providing the tip.21
A person who trades on the basis of material, nonpublic information conveyed by a Member or staff member in breach of a duty also could be liable for illegal insider trading as a tippee. An additional element of liability is that the tippee knew or should have known of the tipper’s breach of duty in disclosing the information.22
Investigations into potential trading or tipping by Members of Congress or their staff could pose some unique issues, including those that may arise from the Constitutional privilege
provided to Congress under the Speech or Debate Clause, U.S. Const. art. I, § 6, cl.1.23 The Supreme Court has stated that “[t]he Speech or Debate Clause was designed to assure a co-equal branch of the government wide freedom of speech, debate, and deliberation without intimidation or threats from the Executive Branch.”24 The Clause “protects Members against prosecutions that directly impinge or threaten the legislative process.”25 While the “heart” of the privilege is speech or debate in Congress, courts have extended the privilege to matters beyond pure speech and debate in certain circumstances.26 There may be circumstances in which communication of nonpublic information regarding legislative activity to a third party falls “within the ‘sphere of legitimate legislative activity,’”27 and thus may be protected by the privilege. Conclusion
The SEC’s continued focus on insider trading and innovative investigative techniques demonstrates our commitment to pursuing potentially suspicious trading in a variety of contexts. While recent innovations in the Division of Enforcement are enhancing our ability to obtain that evidence, to establish liability we must satisfy each of the elements of an insider trading violation, including the materiality of the information, the nonpublic nature of the information, the presence of scienter, and a fiduciary or other duty of trust and confidence that was violated by the trading or tipping. While trading by Members of Congress or their staff is not exempt from the federal securities laws, including the insider trading prohibitions, there are distinct legal and factual issues that may arise in any investigations or prosecutions of such cases. Any statutory changes in this area should be carefully calibrated to ensure that they do not narrow current law and thereby make it more difficult to bring future insider trading actions against individuals outside of Congress.
SEC Charges Securities Professionals and Traders in International Hedge Fund Portfolio Pumping Scheme
On Feb. 24, 2011, the Securities and Exchange Commission charged two securities professionals, a hedge fund trader, and two firms involved in a scheme that manipulated several U.S. microcap stocks and generated more than $63 million in illicit proceeds through stock sales, commissions and sales credits.
The SEC alleges that Florian Homm of Spain and Todd M. Ficeto of Malibu, Calif., conducted the scheme through their Beverly Hills, Calif.-based broker-dealer Hunter World Markets Inc. (HWM) with the assistance of Homm’s close associate Colin Heatherington, a trader who lives in Canada. They brought microcap companies public through reverse mergers and manipulated upwards the stock prices of these thinly-traded stocks before selling their shares at inflated prices to eight offshore hedge funds controlled by Homm. Their manipulation of the stock prices allowed Homm to materially overstate by at least $440 million the hedge funds’ performance and net asset values (NAVs) in a fraudulent practice known as “portfolio pumping.”
The SEC additionally brought administrative proceedings against HWM’s trader and chief compliance officer, who each agreed to settle the SEC’s charges against them.
“Ficeto and Homm repeatedly abused their positions as securities industry professionals to commit a wide-ranging, cross-border fraudulent scheme,” said Rosalind R. Tyson, Director of the SEC’s Los Angeles Regional Office. “By manipulating U.S. stocks through a U.S. broker-dealer, they defrauded investors in offshore hedge funds and reaped millions of dollars from their illicit activities.”
According to the SEC’s complaint filed in the U.S. District Court for the Central District of California, Homm along with Ficeto and Heatherington conducted the scheme from September 2005 to September 2007. Homm misused the assets of the hedge funds to allow him, Ficeto, Heatherington and HWM to manipulate upwards the prices of the U.S. microcap stocks in which the hedge funds held a position. They used a number of classic manipulative techniques such as placing matched orders, placing orders that marked the close or otherwise set the closing price for the day, and conducting wash sales. This manipulation enabled Ficeto, Homm and Heatherington to generate enormous profits through Ficeto’s and Homm’s co-ownership of HWM and their sale of the microcap stock shares to the hedge funds at inflated prices. Ficeto garnered further illicit profits through his control of Hunter Advisors LLC, which directed the investment activities of a “fund of funds” that also participated in the stock manipulation.
The SEC’s complaint alleges that the principal traders at HWM and the London-based hedge funds manager Absolute Capital Management Holdings Limited (ACMH) exchanged hundreds of instant messages (IMs) that were recorded on a secret, alternate messaging system that allowed them to communicate freely without fear that their scheme would be detected by the SEC. As reflected in those secret IM messages, ACMH’s trader (typically Heatherington) under Homm’s direction would instruct Ficeto or HWM’s trader (Tony Ahn) acting under Ficeto’s direction to place matched orders, transactions that marked the close, or wash sales for the purpose of artificially raising or stabilizing the microcap stock prices.
The SEC’s complaint charges Ficeto, Homm, Heatherington, HWM, and Hunter Advisors LLC with violating the antifraud provisions of the federal securities laws, and additionally charges HWM and Ficeto with violations of several broker-dealer recordkeeping provisions. The SEC seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and financial penalties. The SEC also seeks an order permanently barring Ficeto from participating in any penny stock offering or from serving as an officer or director of a public company.
The SEC instituted separate but related administrative proceedings against Ahn and HWM’s former chief compliance officer Elizabeth Pagliarini, who each agreed to settle their cases without admitting or denying the SEC’s findings. Ahn agreed to pay a $40,000 penalty, comply with certain undertakings, and be barred from association with a broker and dealer for five years. Pagliarini agreed to a $20,000 penalty and one-year suspension as a supervisor with a broker or dealer.
Securities Fraud Whistleblower Lawsuit Information, SEC Whistleblower Incentive Program Lawsuit Information, Financial Fraud Derivatives Lawsuit Information, Financial Fraud Whistleblower Lawsuit Information, & Financial Fraud Bounty Lawsuit Information
Securities fraud, also known as stock fraud and investment fraud, is the unlawful practice of inducing investors to make investment decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities fraud whistleblower lawsuits include deceptive practices in the stock and commodity markets, and occur when investors are enticed to part with their money based on fraudulent misrepresentations.
Securities fraud whistleblower lawsuits include outright theft from investors and misstatements on a public company's financial reports as well as a wide range of other actions, including insider trading, front running and other illegal acts on the trading floor of a stock or commodity exchange. Evidence for a securities fraud whistleblower lawsuit may include:
False or misleading information on a company's financial statement;
False or misleading information on Securities and Exchange Commission (SEC) filings;
Lying to corporate auditors;
Stock manipulation schemes;
Embezzlement by stockbrokers;
Manipulation of a security’s price or volume;
Fraudulent or unregistered offer or sale of securities, including Ponzi schemes, high yield investment programs or other investment programs;
Brokerage Account and Retirement Account Fraud;
False or misleading statements about a company;
Failure to file required reports with the SEC;
Abusive naked short selling;
Theft or misappropriation of funds or securities;
Fraudulent conduct or other problems associated with municipal securities transactions or public pension plans; and
Bribery of foreign officials
Through new legislation the federal government is offering financial incentives to securities fraud whistleblowers and other financial fraud whistleblowers to step up and blow the whistle on properly reporting financial fraud including the above listed forms of securities fraud that lead to SEC violations and fines. These new whistleblower bounties can be collected by whistleblowers that properly report SEC violations, financial fraud, securities fraud, commodities fraud, and stimulus fraud.
Other forms of SEC Violations including reporting problems with a brokerage or advisory account; fraudulently preventing access to funds or securities; fraudulent order handling, trade execution, or confirmations; fraudulent fees, mark-ups or commissions; and inaccurate or misleading disclosures by financial professionals, may also lead to potential SEC bounties, if the fraudulent acts result in fines of over $1 million and are properly reported.
SEC Securities Fraud Whistleblower Lawsuits, Dodd-Frank Act Financial Fraud Whistleblower Bounty Actions, CFTC Commodity Fraud Whistleblower Lawsuits, SEC Whistleblower Incentive Program Claims, Financial Fraud Derivatives Bounty Actions, & Financial Fraud False Claims Act Whistleblower Lawsuits
Financial Fraud Whistleblower Lawsuits, Securities Fraud Whistleblower Lawsuits, Commodity Fraud Whistleblower Lawsuits, Stimulus Fraud Whistleblower Lawsuits, and SEC Violation Whistleblower Lawsuits will become more common with the enactment of laws like the Dodd-Frank Wall Street Reform and Consumer Protection Act that create bounties that can be collected by whistleblowers that properly report SEC violations, financial fraud, securities fraud, commodities fraud, and stimulus fraud that result in monetary sanctions over one million dollars ($1,000,000.00). The SEC can award the whistleblower up to 30% of the money collected.
Since 2010, there has been an increased number of insider trading cases. In fiscal year 2011 and the early part of fiscal year 2012, the SEC obtained judgments in 18 actions arising out of its investigation of Galleon hedge fund founder Raj Rajaratnam, including a record $92.8 million civil penalty against Rajaratnam personally. The SEC also discovered and developed information that ultimately led to criminal convictions of Rajaratnam and others, including corporate executives and hedge fund managers, for rampant insider trading. In addition, the SEC recently filed an insider trading action against Rajat Gupta, a former director of both Goldman Sachs and Procter & Gamble, whom the SEC alleged provided confidential Board information about both companies’ quarterly earnings and about an impending $5 billion Berkshire Hathaway investment in Goldman Sachs to Rajaratnam, who traded on that information.
Among others charged in SEC insider trading cases in the past fiscal year were various hedge fund managers and traders involved in a $30 million expert networking trading scheme, a former Nasdaq Managing Director, a former Major League Baseball player, a Food and Drug Administration chemist, and a former corporate attorney and a Wall Street trader who traded in advance of mergers involving clients of the attorney’s law firm. The SEC also brought insider trading cases charging a Goldman Sachs employee and his father with trading on confidential information learned by the employee on the firm’s ETF desk, and charging a corporate board member of a major energy company and his son for trading on confidential information about the impending takeover of the company.
These SEC insider trade actions as well as other securities fraud violations can be the basis of bounty actions that can pay millions of dollars, tens of millions of dollars, or hundreds of millions of dollars in whistleblower rewards. Some past securities fraud cases and fines include: the SEC fine of $550 million dollar against Goldman Sachs in 2010 to settle a civil suit over a package of mortgage-backed securities designed by a hedge fund which was shorting the housing market, a $50 million dollar SEC fine of GE for accounting misdeeds when General Electric broke rules and defrauded investors, and the SEC fines to Citigroup Inc. and Putnam Investments for $20 million and $40 million, for alleged concealing from customers the fact that brokers were paid to recommend certain mutual funds, creating a conflict of interest.
By creating whistleblower bounties for investors and people with specific information of insider trading and securities fraud, it is expected that hard to detect securities fraud including derivative market fraud and investment fraud will be exposed to help regulate the financial market and prevent large investment corporations, hedge fund managers, corporate executives, banks, money managers, and large corporations from committing financial fraud of billions of dollars.
Hedge Fund Insider Trade Whistleblower Lawyers, Private Equity Fund Insider Trade Whistleblower Lawyers, Stock Manipulation Scheme Whistleblower Lawyers, Executive Illegal Insider Trade Whistleblower Lawyers, Confidential Insider Trade Whistleblower Lawyers, Confidential Securities Fraud Whistleblower Lawyers, and Confidential Financial Professional Whistleblower Lawyers
Hedge fund securities fraud whistleblower lawyer and insider trade whistleblower lawyer, Jason S. Coomer, works with executive insider trade whistleblowers, hedge fund insider trade whistleblowers, private equity fund fraud whistleblowers, false misleading information on a company's financial statement whistleblowers, false information on Securities and Exchange Commission (SEC) filing whistleblowers, stock manipulation scheme whistleblowers; embezzlement by stockbroker whistleblowers; and other securities fraud whistleblowers that are stepping up and blowing the whistle on insider trading, securities fraud, SEC violations, and other forms of financial fraud. By working with financial professional whistleblowers and securities fraud whistleblowers to expose false misleading information on a company's financial statements, false information on Securities and Exchange Commission (SEC) filings, insider trading; stock manipulation schemes; embezzlement by stockbrokers; and other securities fraud, he is working to help regulate the financial markets, protect his clients, and help claim rewards for financial whistleblowers.
As a Insider Trade Whistleblower Reward Lawyer, Confidential Insider Trading Whistleblower Reward Lawyer, andSEC Violation Whistleblower Reward Lawyer, he works with other powerful securities fraud whistleblower reward lawyers that handle large Securities Fraud Whistleblower Reward Lawsuits, Qui Tam False Claims Act Lawsuits, and other Financial Fraud Lawsuits. He works with Dallas Executive Insider Trade Whistleblower Lawyers, New York Wall Street Confidential Insider Trade Whistleblower Lawyers, Los Angeles Illegal Insider Trade Whistleblower Lawyers, San Francisco Hedge Fund Insider Trade Whistleblower Lawyers, Dallas SEC Violation Money Manager Whistleblower Reward Lawyers, Chicago Hedge Fund SEC Violation Insider Trade Whistleblower Lawyers, Dallas Hedge Fund Insider Trading Whistleblower Lawyers, and other Securities Fraud Whistleblower Lawyers throughout the United States and the World to blow the whistle on fraud.
Hedge Fund Insider Trading Whistleblower Lawyer, Private Equity Fund Insider Trading Whistleblower Lawyer, Stock Manipulation Scheme Whistleblower Lawyer, Executive Insider Trading Whistleblower Lawyer, Confidential Illegal Insider Trade Whistleblower Lawyer, Confidential Securities Fraud Whistleblower Lawyer, and Confidential Financial Professional Whistleblower Lawyer
As a Confidential Whistleblower Reward Lawyer, Jason S. Coomer, commonly works with other powerful financial fraud and securities fraud whistleblower lawyers to handle large Securities Fraud Whistleblower Lawsuits, International Whistleblower Lawsuits, Medicare Fraud Whistleblower Lawsuits, Defense Contractor Fraud Whistleblower Lawsuits, Government Contractor Fraud Whistleblower Lawsuits, and other confidential whistleblower reward lawsuits. If you are the original source with special knowledge of fraud and are interested in learning more about a whistleblower reward lawsuit, please feel free to contact Confidential Insider Trade Whistleblower Reward Lawyer and Securities Fraud Insider Trading Whistleblower Lawyer Jason Coomer via e-mail message.
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