During the 1980s and 1990s, fraud in the securities sector of the financial districts was running rampant. Business owners were raking in millions in fraudulent transactions while holding employees hostage from reporting schemes with the treat of losing their jobs if they opened their mouth. The Securities and Exchange Commission was aware there were problems, but no one would come forward to help expose those cheating the system. That changed in 2010 when Congress enacted Dodd-Frank Wall Street Reform for combating financial fraud pertaining to securities. Whistleblower programs aimed to stop employers that were conducting fraud by providing employees a safer haven.
Violations to financial security laws could now be presented to the Securities and Exchange Commission (SEC), and employees were protected, as well as getting rewarded financially. When the reform went into effect in 2010, the law firm of Labaton Sucharow focused their company efforts on offering workers a safe place for consulting and exposing their employers that were conducting securities fraud. This law firm went full force by bringing in international forensic accountants, in-house investigators, and professional financial analysts, to support counsel for these growing number of whistleblowers.
Those employees that were being harassed with loss of job security spoke of the fraud being conducted at their jobs, and now they were able to bring an end to the harassment that was making their life and jobs miserable. The reward being offered to these whistleblowers was big, and under the rules of the Dodd-Frank Wall Street Reform program, the SEC paid eligible employees a staggering 10-30% of all monetary sanctions that were being collected when successful Securities and Exchange Commission enforcement exceeded $1 million dollars. Another reason for this increase in reports was that the Dodd-Frank Act stopped any retaliation by those reported employers against these whistleblowers pursuant to the program rules.
Employers that were still conducting fraud against the financial sector began looking more carefully now at how they ran their companies because those harassing tactics used against employees in the past were no longer effective. The financial reward plus job security made it easier for employees to then anonymously file these complaints against their employers without worry of having to maintain difficult relationship with employers. Whistleblowers were now able to report securities violations with complete anonymity when represented by a lawyer specializing in these particular type cases.
Employees concerned about securities fraud taking place at work are advised to call a local attorney and ask about the SEC Whistleblower Program.
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