A whistleblower exposes illegal conduct. The conduct may involve fraud of any type. The Whistleblower is entitled to protection in employment and is protected against retaliation.
Various Federal and State statutes provide for the award of compensation to the Whistleblower. Attorneys’ fees also may be awarded.
Whistleblowers have exposed substantial fraud in many areas: violation of securities laws, fraud as against the Federal Government, Medicaid fraud and fraud by military contractors to name a few.
Anthony M. Abraham, Esq., P.C. investigates Whistleblower claims. We will prosecute verifiable claims.Fraud in the Purchase and Sale of Securities
Fraud in the purchase and sale of securities is not only actionable by a public investor through the FINRA arbitration process, it is a crime. Any person who purchases or sells securities, or anyone connected or involved with a securities fraud, can be prosecuted. This includes even the prosecution of Domestic Diva, Martha Stewart. Corporations may be prosecuted also.Securities Fraud Whistleblowers
Securities Whistleblowers may report fraud to the SEC, a federal enforcement and regulatory agency. Exceptions as to who can complain relate to whether the whistleblower himself or herself, is employed by the SEC itself. The information must be “new” and not previously known. Securities whistleblowers are eligible to receive between 10% and 30% of the recovery. The action must involve a recovery of over $1 million. Anti retaliation provisions exist to protect the Whistleblower.
Retaliation entitles the Whistleblower to file a civil complaint against their employer which retaliated. Retaliation, of course, means firing, demotion or any other form of harassment. Damages are strong with recompense for lost pay (twice the amount of any lost pay) and collection of attorneys’ fees among other remedies.
Here is the sort of conduct which may be reported. The conduct below is not exclusive:Insider Trading
This applies when an “insider”, e.g., i.e., officer, director, has confidential information about a company and leaks it or purchases or sells securities based on the information, to either make a profit or avoid losses. Any persons to whom the “insider” leaks the information and then trades on it, may also be committing a crime. Exposing this information to the SEC is a valid Whistleblower complaint.Fraud in Accounting or Other Financial Statements and Reporting
Accounting records are frequently falsified. The purpose of course, is either to exaggerate income to promote the market price of securities or to fraudulently obtain bank loans; or to hide income. Falsification of business records is a state crime as well. The false accounting information can affect the market price of securities, which then becomes a fraud on investors. Accounting fraud may be reported to the SEC as a valid whistleblower complaint. In the 1980s and 1990, accounting fraud scandals were rampant with companies like Enron or Worldcom being involved.Ponzi Scammers
A Ponzi scheme involves promising high returns to investors, fraudulently stating that the returns were achieved, then paying earlier investors alleged returns with money from later investors. This is fraudulent.
Of late, the world was shocked by the extent of the Ponzi perpetrated by the Bernard L. Madoff Securities LLC Ponzi scam which lasted over twenty years. A total of approximately $20 billion was collected from investors. By the end of the Ponzi scheme when Madoff was caught, the aggregate alleged value of the Madoff Fund of about $65 billion. Without doubt, if an investor or employee you knew of this scheme and reported it to the SEC, this would have been a valid Whistleblower complaint.Whistleblowing in Employment Discrimination Some Notable Examples: Paradigm Capital Management
In 2015, the SEC announced a whistleblower award of 30 percent of amounts collected in connection with the claim. In the Matter of Paradigm Capital Management, Inc. and Candace King Weir, File No. 3-15930 (June 16, 2014).
This was the SEC’s first retaliation case. The whistleblower received over $600,000. Retaliation occurred as the result of the Whistleblower report to the SEC The Whistleblower was removed from his then job and removed from the Whistleblower’s supervisory responsibilities. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case. Here are a couple of more cases:California Retaliation Lawsuit
Delhi Mental Health Rehab Center, a mental health rehabilitation center in California paid $25,000 to settle a federal action brought by the Equal Employment Opportunity Commission (EEOC). The EEOC alleged that the center fired a male employee in retaliation for helping his female co-workers oppose sexual harassment occurring in the center.
Two separate actions were advanced by the EEOC. The first action alleged that a supervisor at the center subjected women to crass sexual comments and unwanted touching over several years. That action was settled for $145,000. Nine women were plaintiffs.
A subsequent lawsuit was advanced by the Federal Equal Employment Opportunity Commission (EEOC) on behalf of an employee, Mendoza, who complained about sexual harassment at the Dehli Mental Health Rehab Center in California. Dehli fired Mendoza after the EEOC contacted to schedule interviews of witnesses to an earlier lawsuit filed by his fiancé concerning sexual harassment. The EEOC took the position that this retaliatory.Major Jury Award Against the City of Boston
A jury entered a verdict against the city of Boston and granted a significant award following a lawsuit for racial discrimination. Charles, who is African-American, was employed by the city of Boston commencing in 1986. Charles had a flexible schedule because of child rearing responsibilities.
In the 1990s, Charles began reporting to a new boss, Vivian Leo. Leo demanded that Charles stop using a management title designation, and reduced all allowances for flexible hours , transportation privileges and the like, granted to white workers.
Leo claimed retaliation for this and other reasons.
Charles sued. A jury awarded her $10.9 million in total damages, constituted of both punitive and actual damages, in 2015.Call Us for a Free Consultation
We invite you to call or email us for a free consultation, tell us your problems and concerns and we will give you an honest assessment of your case and help you determine the best course of action.
If you are a victim of securities fraud, you should call us and retain a sophisticated attorney to see if your losses can be recovered. Mr. Abraham is experienced as a securities fraud lawyer.