There were a few gasps late on Tuesday when the SEC declared that it was awarding more than $14m to an unnamed whistleblower, whose information had helped the US authorities recover “substantial” investor funds in an unnamed case.
That’s quite a prize and will no doubt encourage other would-be latter-day bounty hunters. But there is evidence that the SEC really didn’t want to set this sort of precedent at all. Read more
We missed this interesting idea on Friday. From the SEC…
The Securities and Exchange Commission today announced that three whistleblowers have been awarded more than $25,000 combined for tips and information they provided to help the SEC and Justice Department stop a sham hedge fund. Read more
This is a guest post from Clive Howard, a senior principal lawyer in RJW Slater & Gordon’s employment department. His high-profile cases include acting for Paul Moore in a whistleblowing case against HBOS, and Brodie Clark, former head of the UK Border Force, against the Home Office.
Whistleblowing incentives just got international Read more
There was a piece in the Telegraph on Sunday that may well sum up the thoughts on the Libor scandal of many who worked, or are still working, in banks. It’s called “Libor scandal: How I manipulated the bank borrowing rate“. It gives a sense of how it is that a hell of a lot of people didn’t question the manipulation of the rate.
Frankly, anyone with a Bloomberg terminal in 2008 would have been in on this, as one could see that the rates various banks had submitted did not reflect where they could fund. Deals were getting torn apart all over the place because no one could ramp up funding at a decent rate, despite what those screens said. Read more
FT Alphaville drew attention on Thursday to an alleged whistleblower letter that arrived in the CFTC’s mailbox this week.
The author of said note claimed to be a JP Morgan employee with inside information about the bank’s (supposedly less than honest) activities in the precious metals market. He wrote that he was whistleblowing because he no longer had faith or belief that what the bank was doing for society was “bringing value to people”. Read more
The SEC’s whistleblower programme that rewards financial insiders for providing tip offs on alleged securities fraud looks set to make its first payouts, something the agency had hoped to do by at least next year. The programme, launched under the Dodd-Frank Act, offers payments of at least $100,000 when the information provided to the SEC results in big enforcement penalties, reports the WSJ. To date 334 tips have been received under the programme from the day it became effective on August 12th to the end of September. This has included three whistleblowers, who came forward alleging that Bank of New York Mellon and State Street overcharged clients for currency trades, and who have now also filed claims for bounties. The banks deny the allegations and the SEC is investigating.
Last month Europe’s carbon trading industry was rocked by a series of cyber thefts — including the stealing of €10m worth of European Union emissions allowances (EUAs), which took place in Prague. Daniel Butler, a broker for a Czech-based carbon trader, was instrumental in breaking the story. Here, Butler gives his view of the nascent carbon trading industry.
British pharma giant GlaxoSmithKline will pay $750m to settle claims over manufacturing failures at a plant in Puerto Rico, the FT says. US regulators said that the settlemtn was the fourth-largest fine they had ever imposed on a drug company, in relation to the production and sale of “adulterated” drugs. More than that — the penalty involves a record whistleblower settlement in the first case of its kind, reports the NYT. A GSK manager who exposed the Puerto Rico failures will collect $96m from the federal government.
GlaxoSmithKline has finalised a $750m payment with US authorities including a record whistleblower settlement triggered by manufacturing failures at its Puerto Rico plant, reports the FT. The UK-based pharmaceuticals group agreed to what US regulators said was the fourth-largest fine they had ever imposed on a drug company, in relation to the production and sale of “adulterated” drugs. The sum included civil and criminal penalties, with $96m paid to Cheryl Eckard, a former quality assurance manager at GSK who alerted authorities to manufacturing abuses, marking the largest whistleblower penalty yet.
New US whistle-blowing incentives within the Dodd-Frank financial reform act – that could net informants multimillion dollar pay-outs – are likely to generate a surge in allegations against US-listed companies and Wall Street banks, lawyers have told the FT. People who provide original information that forms part of a successful SEC suit will be entitled to 10 to 30 per cent of any sanction over $1m, with proceeds from further regulatory action or shareholder lawsuits thrown in.