WHISTLEBLOWERS REPORT MANY TYPES OF VIOLATIONS TO THE SEC AND CFTC

Qualified/Selective Representation

Acting as a whistleblower for accounting and financial fraud and other illegal acts can have a profound impact on an individual's life and career. While it is not required to have a lawyer before reporting a tip to the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), it is vital to have a knowledgeable lawyer review and verify the alleged violation. Also, if the whistleblower wishes to report anonymously, he or she must do so through an attorney.

Some situations involve manipulation of financial results and inaccurate reporting of financial results in SEC filings or through other communications with investors such as press releases. Any scheme to revenue by "cooking the books," such as making false entries to accounting records or creating "cookie jar reserves" to manipulate revenues may be fraudulent, including smoothing revenue improperly from quarter to quarter to meet targets. Other involve failures to disclose material information to investors, such as conflicts of interest.

Providing Nationwide Representation To SEC And CFTC Whistleblowers

The chairman of the SEC recently placed renewed emphasis on investigating accounting fraud. The Law Offices of Daniel J. Hurson, LLC, represents clients who are reporting SEC or CFTC violations related to accounting and financial fraud and other violations. Dan Hurson handles matters pertaining to companies throughout the United States and worldwide.

Becoming a whistleblower is a big decision which can potentially change your life. Corporate officers, compliance officers, attorneys, and internal and outside auditors are treated differently by the SEC whistleblower rules. As you consider this critical path, you should seriously consider retaining experienced counsel who has actually handed these cases both on the prosecution and defense sides and has represented whistleblowers reporting such violations. At his firm, you get the experience and personal service of attorney Dan Hurson, who will endeavor personally to provide the guidance and counsel you need.

Read an article about whistleblowers, recently written by Daniel Hurson: Becoming a Successful SEC Whistleblower

An Experienced Attorney For Those Reporting Accounting/Financial Fraud And Other Securities Law And CFTC Violation

Situations that may qualify as whistleblower claims for accounting and financial fraud include:

  • Manipulating financial results, or "cooking the books," to make a company appear more profitable or to "smooth out" earnings.
  • Falsifying accounting entries.
  • Books and records violations by managers.
  • Falsifying SEC filings or issuing misleading guidance.
  • Filing false press releases regarding company revenue, profits or losses.
  • Private equity enforcement. Violations of the Investment Advisors Act of 1940 may prove fertile for whistleblowers. The SEC has created an Asset Management Unit and has indicated it will aggressively investigate hedge fund and other fund advisors who misrepresent the value, safety and liquidity of investments made by the funds the charging of excessive fees or conceal conflicts of interest. A number of these cases have produced penalties in excess of the $1 million threshold needed to create whistleblower award opportunities.
  • Ponzi schemes or other forms of fraudulent offering of securities, or the failure to register securities as required by the SEC. "Pump and Dump" schemes to sell overvalued securities through fraudulent means are among the cases the SEC frequently brings.
  • Auditors and compliance officers. While these parties are initially restricted in their ability to become whistleblowers under the Dodd Frank Act, there are important exceptions to those restrictions. Dan Hurson has previously written about how those exceptions may apply so as to allow these individuals to become whistleblowers. See articles about auditors [HERE], and compliance officers [HERE]. The SEC has in recent months made several awards to compliance officers, and it recognizes that there are situations, i.e. "paper" compliance programs, when such whistleblowing is encouraged.
  • Cyber security. The SEC has in recent years issued guidance regarding how firms must protect data against cyber security breaches. It has sanctioned an investment advisor for ignoring these rules and having no system in place to safeguard data containing personal information on thousands of its customers, which led to a breach. A whistleblower who could bring the SEC information regarding similar failures might succeed in obtaining an award provided the $1 million fine threshold can be exceeded, given that the SEC appears eager to act against companies that have failed to keep up with this growing threat.
  • CFTC Whistleblowing. The Commodities Futures Trading Commission (CFTC) has a whistleblower program very similar to that of the SEC. As of Spring 2017, the CFTC has made three awards. It received about 276 tips. The CFTC has a whistleblower office, and it does notice around 40 cases a year in which awards could be made, and it has a fund in excess of $247 million available with which to pay the awards. Its last award was for 10 million. The CFTC handles foreign currency trading (FOREX) frauds, precious metals schemes, and was enormously successful in bringing cases regarding manipulation of global interest rates (the LIBOR cases). The CFTC handed out huge fines in this litigation against five global banks totaling nearly $1.8 billion. The CFTC now has jurisdiction over the $400 trillion swaps market, a dozen times bigger than the futures market. The LIBOR fraud was essentially accomplished by a handful of rogue traders at the banks. Depending on the timing, a single whistleblower, had one come forth, might have earned an award in the hundreds of millions of dollars. The CFTC whistleblowing arena may offer untapped opportunities for large awards.

The process of reporting a violation and the resulting investigation can be arduous and complex, requiring the assistance of an experienced attorney. Dan Hurson knows what the SEC looks for in whistleblower cases. He understands what information will make a viable claim and is familiar with the securities laws as they relate to accounting and financial fraud violations. As your lawyer, he will work diligently to ensure that your rights and interests are protected.

Direct Contact With Your Attorney

Discuss your potential claim with an experienced, accounting fraud whistleblower attorney. Call Dan at 473-458-5628 or send an email using our online contact form for a free, confidential initial consultation. Referrals from other attorneys are also welcome.