June 16, 2014
SEC Settles $2.2 Million Enforcement Action Following Whistleblower Complaint by [Jordan Thomas][Prior Firm] Client
Today, the SEC charged the Albany-based investment advisory firm Paradigm Capital and its owner, Candace Weir, with violating the federal securities laws by engaging in prohibited and undisclosed principal transactions on at least 83 separate occasions, among other charges. Paradigm and Weir agreed to pay total sanctions of approximately $2.2 million to settle the charges. The SEC...
Articles & Perspectives
June 4, 2014
SEC Announces New Whistleblower Award
Labaton Sucharow
The SEC announced yesterday that it will pay two whistleblowers an award of $875,000 for their reporting of original information that led to a successful SEC enforcement action. The total award, which will be split equally between the two whistleblowers, represents 30% of the sanctions collected by the SEC in the case – the maximum percentage award...
Articles & Perspectives
May 30, 2014
[Jordan Thomas][Prior Firm][‘s] Client Profiled in Financial Times
One of the first pieces of advice we give to any prospective client is that while being a whistleblower can be rewarding in many ways, it’s not always easy or glamorous. To the contrary, being a whistleblower can present significant personal and professional challenges, as an article published in this week’s Financial Times Weekend Magazine highlights. The...
Articles & Perspectives
May 29, 2014
Another Win For Whistleblowers: Court Allows Retaliation Claims Based on Internal Reporting
Labaton Sucharow
One of the most important outstanding questions for SEC whistleblowers and their counsel is whether a whistleblower must report possible securities violations to the SEC to trigger Dodd-Frank’s anti-retaliation provisions. Is it enough for a whistleblower to internally report concerns to his or her company, or does only external reporting to the Commission give rise...
Articles & Perspectives
May 27, 2014
What’s the Harm of Corporate Scandals?
Labaton Sucharow
In our experience, one of the primary reasons that whistleblowers come forward to report possible securities violations (and the reason that many attorneys like us chose to devote our professional lives to representing whistleblowers) is concern about the harm that financial misconduct causes. In some cases, this harm is easy to perceive and measure: shareholders...
Articles & Perspectives
May 21, 2014
CFTC Announces First Whistleblower Award
Labaton Sucharow
The Commodities Futures Trading Commission (“CFTC”) announced on Tuesday the first award paid under the CFTC Whistleblower Program launched in 2010. Like the SEC Whistleblower Program, the CFTC Whistleblower Program was created by the Dodd-Frank Act, and allows eligible individuals to receive a monetary award if they provide original information that leads to a successful CFTC enforcement action resulting...
Articles & Perspectives
May 15, 2014
SEC Wins Fraud and Insider Trading Trial Against Texas Investors
Labaton Sucharow
The SEC secured a major trial victory this week after a federal jury in Manhattan found Texas investors Sam and Charles Wyly liable for all fraud and insider trading claims brought by the agency. The SEC successfully proved that the brothers (the latter of whom died before the case was brought to trial) had constructed an elaborate system of...
Articles & Perspectives
May 5, 2014
Is it a Crime? What Happens When Whistleblowers Report Potentially Criminal Misconduct to the SEC
Labaton Sucharow
The SEC, although it wields enormous power in the securities markets, has a built-in limitation on its authority: it’s a civil law enforcement agency, meaning that it can charge and penalize wrongdoers for civil violations of the securities laws, but it can’t prosecute them for crimes or put them in jail. However, as SEC Chair...
Articles & Perspectives
May 1, 2014
Guest Post: The SEC Could Find New Uses for an Old Law
Financial Times
Articles & Perspectives
May 1, 2014
The SEC Could Find New Uses for an Old Law
Labaton Sucharow
One of the key messages from the SEC enforcement staff this year is that it intends to expand its enforcement arsenal, both by using newer laws and by finding innovative ways to use older laws. In a guest post published today on Financial Times’ Alphaville blog, I focus on two such provisions – Sections 20(a)...
Articles & Perspectives
May 1, 2014
Cybersecurity – Growing Technological Threats Raise New Issues for Investors and the SEC
Labaton Sucharow
In recent months, the Heartbleed bug and massive data breaches like those experienced by Target have drawn increased attention to cybersecurity, and the need to better protect the almost unfathomable amount of sensitive data stored electronically in the U.S. Although the securities laws may not always immediately come to mind when considering such high-tech threats,...
Articles & Perspectives
April 29, 2014
Financial Whistleblowing on the Rise in Europe
Labaton Sucharow
As we’ve noted in previous posts, the SEC Whistleblower Program has resulted in a sharp increase in the amount of actionable information provided to the agency, with more than 3000 whistleblower tips received in 2013 alone. Now, reports from the Europe and the United Kingdom – which have experienced their own rash of financial scandals in recent years...
Articles & Perspectives