New Law Encourages Reporting Of Securities Fraud Whistleblower Lawsuits
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UPDATED: Jul 16, 2021
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Whistleblower lawsuits, also known as Qui Tam lawsuits, expose fraudulent activity against the government and compensate those who report that fraud with a percentage of what is recovered. Given that most Qui Tam lawsuits involve millions – even billions – of dollars, that compensation can be substantial. A new law passed by the Obama Administration is aimed at encouraging those who work in the securities industry to report fraudulent activity – and be paid handsomely for it.
Securities Fraud Whistleblower Lawsuits: The Dodd-Frank Reform Act
The Dodd-Frank Reform Act, part of the Obama Administration’s financial regulatory reform, provides important incentives for those who discover fraudulent activity in a wide range of securities industry jobs such as brokers, branch managers, compliance officers, quantitative analysts and data system programmers, senior managers and even board members.
The Act says that any individual who discloses “original information” that leads to a securities law conviction will be eligible to receive as much as 30% of the total sanctions recovered by the CFTC (Commodity Futures Trading Commission) or the SEC (Securities & Exchange Commission).
The Dodd-Frank Act is similar to existing whistleblower programs to report tax fraud and insider trading and also has an anti-retaliation provision which allows whistleblowers whose employers have retaliated against them by making adverse employment decisions to sue for reinstatement of their job, double back pay, costs and legal fees.
Qui Tam Lawsuits: Who Can Be A Securities Fraud Whistleblower?
Although the Dodd-Frank Act addresses those in the securities industry, almost anyone can file a whistleblower lawsuit. Qui Tam lawsuits fall under the False Claims Act (FCA) which allows any private citizen who discovers fraudulent activity against the government to file a whistleblower lawsuit on the government’s behalf. The whistleblower does not have to be affiliated with the government or have been personally harmed by the actions they are disclosing. However, hiring an experienced Qui Tam lawyer before blowing the whistle is always recommended.
Hiring A Securities Fraud Qui Tam Lawyer
Hiring a Qui Tam lawyer is a critical element as the False Claims Act is complex area of law and the process of filing a Qui Tam lawsuit is very different than filing a traditional lawsuit. In fact, may law firms limit their practices exclusively to whistleblower lawsuits. Contact an experienced Qui Tam attorney before blowing the whistle to make sure that you understand how the whistleblower lawsuit process works, the compensation for which you may be entitled and above all – to make sure that your interests are adequately protected.