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SEC issues more than $17M award to a whistleblower
- peteradio 4y agoInteresting there is zero information what the award is for precisely, is that typical? It's described as "covered" and "related" actions.
- ademarre 4y agoFrom the post: > "As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity."
- peteradio 4y agoFair enough, but it leaves little to discuss but the amount awarded.
- elil17 4y agoThe information is withheld because they protect the anonymity of the whistleblower. The point of the article is to remind people that financial regulators take care of their informants, both financially and in terms of privacy.
- rkagerer 4y agoWould disclosing which case it is harm their anonymity? Could you figure it out just hunting for recent enforcement actions in the right ballpark? Edit: Looks like guga42k did exactly that in a different comment.
- ourmandave 4y agoAs set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity. Just have to start scanning for $17M bank deposits. Wonder what the violation(s) were and how much they fined whatever entity. And if anybody is working on their backhand before they go to white-collar prison. [Edit] Down voting me is like a backhanded compliment. Just sayin'...
- Akronymus 4y agoCould be a small amount every x days?
- cheaprentalyeti 4y ago> Could be a small amount every x days? I thought "structuring" was illegal. Hmm, maybe they could be paid in bitcoin?
- Akronymus 4y agoNever heard about "structuring" before. Gonna have to look it up.
- rsstack 4y agoI don't think anti-money laundering laws apply to federal agencies. The SEC isn't hiding this payment from the IRS, in this hypothetical scenario they are just hiding it from the bank employees. In reality, I don't think any bank employee is going to see if a customer got "more than $17M" and assume that they're a whistleblower and... do something with that.
- jaywalk 4y agoEven if the SEC structured these payments, I highly doubt they'd be under $10k each. It would take way too long.
- giaour 4y agoIt’s the government; couldn’t they just hand the whistleblower a $17MM stack of paper treasury bonds? (Or, more realistically, credit $17MM of bonds to the whistleblower’s treasury direct account.)
- HWR_14 4y agoStructuring is illegal if it's designed to avoid federal reporting thresholds. You're perfectly able to structure your payments as long as each one is above $10,000 US without it triggering any US law. I believe there is also paperwork you can fill out to structure payments below $10,000 apiece (the reason you have to fill out paperwork in that case is to prove the reason for the many smaller payments wasn't to avoid the bank filling out that paperwork on your behalf.) Meanwhile, lottery winners, people employed at a business and many others receive money at regular intervals.
- chollida1 4y ago> The SEC has awarded approximately $1.3 billion to 278 individuals since issuing its first award in 2012. That's either alot of corruption that's been caught due to whistleblower rewards or an indication of the amount of corruption in the US if you are more cynical. Whsitleblower's are eligible for 10 to 30% of the money collected from fines, so the SEC is also making alot of money from this as well. Here's the list they maintain if you want to look: https://www.sec.gov/whistleblower/pressreleases https://www.sec.gov/whistleblower/pressreleases
- gumby 4y ago> That's either alot of corruption that's been caught due to whistleblower rewards or an indication of the amount of corruption in the US if you are more cynical. Given a stock market of around $100T (and the SEC covers more than stocks) it would argue for a rather small amount of corruption, were it the only signal. In fact I believe the corruption at this level is quite small. Really, why bother when you can do it wholesale (e.g. telecoms simply capturing the regulators)? > Whsitleblower's are eligible for 10 to 30% of the money collected from fines, so the SEC is also making alot of money from this as well. These fines go to the treasury; it's not like they fund operations from it. BTW civil forfeiture, if you even believe in it at all, should go to the state or federal general funds. The current system is simply legalized theft.
- lotsofpulp 4y ago> In fact I believe the corruption at this level is quite small. Really, why bother when you can do it wholesale (e.g. telecoms simply capturing the regulators) That is still corruption. Sufficiently provable and easy to convict corruption might be small. Quid pro quo corruption where nothing is in writing is huge.
- soledades 4y ago
- elil17 4y agoThere is a very interesting podcast episode on "Freakonomics" where they interview a researcher who posits that there are forms of corruption that speed economic growth at the cost of fairness and other forms which do not speed economic growth. https://freakonomics.com/podcast/season-11-episode-12/ https://freakonomics.com/podcast/season-11-episode-12/
- olalonde 4y agoNot sure how to feel about that, this is a lot of money... The cobra effect comes to mind[0]. Not to mention that this is all done behind closed doors. [0] https://en.wikipedia.org/wiki/Perverse_incentive#The_original_cobra_effect https://en.wikipedia.org/wiki/Perverse_incentive#The_origina...
- nullspace 4y agoMy understanding is that doing the things that gets you rewarded for whistle-blowing is flat out illegal. You will get into a world of trouble if you go for the cobra effect. In that way, there's both a carrot and a stick right?
- olalonde 4y agoWhat I had in mind was something more innocent like: mid-level employee engages in illegal activity (e.g. misrepresents some critical data in a report, engages in anticompetitive behavior, etc.), blows the whistle on company and puts blame on management. Whistleblower is granted immunity, company is fined large amount and employee collects a large payout. I'm not saying this actually happened but it seems that large rewards may create such incentives. I might also be way off here, but it's really hard to know given the lack of information surrounding the rewards.
- xenadu02 4y agoYou cannot receive an award for activities for which you have decision-making authority. "Whistleblower" in a legal sense has to mean that someone _above_ you asked you do to the illegal activity.
- olalonde 4y agoThat's what I meant by "blaming management", e.g. claiming you were just following orders from above.
- 4y ago
- 0898 4y agoThere's a good Darknet Diaries episode about a social engineer who makes money from these SEC bounties: https://darknetdiaries.com/episode/80/ https://darknetdiaries.com/episode/80/
- muaddirac 4y agoI know it's protected information, but I am curious which types of fraud these amounts are awarded for. There seems to be lot of unpunished public examples of securities fraud (MLMs, cryptocurrencies, legislators dumping or buying stocks at convenient times, etc).
- wmf 4y agoJust look at the headlines https://www.sec.gov/news/pressreleases https://www.sec.gov/news/pressreleases These are just from the past three months: Equitable Financial To Pay $50 Million Penalty To Settle SEC Charges... UBS to Pay $25 Million to Settle SEC Fraud Charges... Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams... SEC Halts Alleged Ongoing $39 Million Fraud... Medley Management and Former Co-CEOs to Pay $10 Million Penalty... SEC Obtains TRO and Asset Freeze against Alleged Perpetrators of nearly $450 Million Ponzi Scheme
- yieldcrv 4y agoAll of those are eligible for bounties Be a bounty hunter and find out Anonymity requires you paying a lawyer to do the filings
- chernevik 4y agoThe lack of information about who got the award and why seems like a huge problem. Who's to say that someone at the SEC didn't get a kickback for this? Or that this didn't go to some friend of the President? Whoever this is, they didn't inform on the mob. Maybe disclosure would be awkward for them professionally -- but with $17mm in hand, I'm not sure how much that matters.
- missedthecue 4y agoWhistle blowers have gotten death threats before, hence the privacy.
- haimez 4y agoPlus the guarantee that if your name is published, you’ll have a hell of a hard time getting another job in your industry (not that this should be true, but I suspect that it is anyway).
- wmf 4y agoMaybe if someone inside the SEC finds corruption they can get a meta-whistleblower award.
- giaour 4y agoThere’s probably an exclusion in the law that prevents employees of the SEC from getting a bounty. But the SEC IG would absolutely investigate a report of something like that, and the civil service has robust protections for whistleblowers against retaliatory actions like getting fired or demoted.
- snarf21 4y agoI think whistle blowers should potentially even be eligible for WitSec. These people are likely giving up their career and ability to provide for their family. This is the least we can do for their service.
- res0nat0r 4y ago
- anewpersonality 4y ago
- donclark 4y agoHow do we know this was actually issued? How do know this is new information? What is it related to?
- thrwwy32 4y agoThey only do these press releases when they issue rewards. They don't include details to protect the whistleblower's identity.
- chabons 4y ago> As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity. This would seem to preclude any way of independently verifying their claims. Realistically, to prove that there existed a whistleblower and this is not just marketing by the SEC, you would need incredible amounts of evidence, and even then you'd have no way of knowing whether the evidence is fabricated. At some level I think you end up just having to trust that the SEC isn't lying about paying whistleblowers.
- nathanvanfleet 4y agoThese days even if they said who the whistleblower was people might suppose they were a "crisis actor."
- olliej 4y agoBecause not all of us are conspiracists?
- deleted 4y ago[deleted]
- seaourfreed 4y agoI just whistle blew on Tether. Tether is likely to crash. I can't wait to get rich from the SEC award
- olliej 4y agoWhat are the tax implications on rewards like this? I recall there being different tax rates for lotteries vs normal wage+salary incomes
- loeg 4y agoLooks like maybe 1099-MISC (ordinary income): https://www.irs.gov/irm/part25/irm_25-002-002 https://www.irs.gov/irm/part25/irm_25-002-002
- intrasight 4y agoMedicaid fraud costs the government about $30 billion a year. They also have a whistleblower program. If you google the topic, all the hits are law firms that will assist you for their cut of your cut. A couple years back, I was considering entering this market with some tech solutions. There is certainly a lot of money on the table.
- nojito 4y agoThe issue with this is that the data is not real-time and Unaggregate claims data is very expensive.
- intrasight 4y agoI meant specialized IT tools to support the law firms that do this work.
- AzzieElbab 4y agoI wish we had whistleblower rewards programs in Canada
- fffobar 4y agoFind a US based ETF with the asset and use the SEC :) (Matt Levine wrote many times about how securities laws can become somewhat global somewhat arbitrarily)
- josephpmay 4y agoIt's often joked that the US government considers their jurisdiction world-wide. If the company does business in the US, there's a good chance the these programs might apply.
- quarterdime 4y agoFrom my understanding, the SEC does not share award recipients' identities. That said, every time I see news of an award I wonder if it's gone to an insider or short seller. The insiders are sort of obvious. But the short sellers... From what I understand, the game goes like this: sniff for signs of fraud in publicly traded companies (I forget who, but one famous short seller jokes that he looks for CEOs with hairpieces). Find evidence of fraud. Often this requires forensic accountants analyzing publicly available financial data. Submit evidence of fraud to the SEC. AND short the stock, go public with the evidence of fraud while disclosing your short position. If you're right, you can hit two paydays: the SEC whistleblower award AND the proceeds from the short sale. I have zero experience with any of this. I am just recalling (as well as I can) a rabbit-hole I went down over a year ago.
- sgjohnson 4y agoWould be pretty dumb to actually open a short position. Put options would have far less downside, and a lot more upside.
- RandomBK 4y agoYou may need to be careful, as it's possible communicating with the SEC might cause you to be privy to material non-public information. For example if you know there's a SEC investigation into the company because you're cooperating with their questions, that might bar you from certain market transactions.
- deleted 4y ago[deleted]
- jasonkhanlar 4y agohttps://old.reddit.com/r/Superstonk/search?q=%22SEC+whistleblower%22&restrict_sr=on&include_over_18=on&sort=top&t=all https://old.reddit.com/r/Superstonk/search?q=%22SEC+whistleb... Superstonk subreddit has many posts discussing about SEC whistleblower awards. For example https://old.reddit.com/r/Superstonk/comments/ngbnmt/sec_awards_whistleblower_28_million_thats_one_of/ https://old.reddit.com/r/Superstonk/comments/ngbnmt/sec_awar... "SEC Awards More Than $28 Million to Whistleblower Who Aided SEC and Other Agency Actions" And over a year ago https://old.reddit.com/r/Superstonk/comments/nf3n64/474_of_the_amount_of_all_sec_whistleblower_awards/ https://old.reddit.com/r/Superstonk/comments/nf3n64/474_of_t... "47.4% of the Amount of all SEC Whistleblower Awards Ever Given Have Been Awarded in the Last 12 Months (Out of 105 Months of Program Activity)" and the last post linked above represents that more persons are realizing and fearlessly speaking up. In my own post https://old.reddit.com/r/infinitypool/comments/v5tgkj/yalol_ftddddd_yet_another_list_of_links_for_the/ https://old.reddit.com/r/infinitypool/comments/v5tgkj/yalol_... I referenced history things I became aware of since 1999 but also in https://old.reddit.com/r/infinitypool/comments/v5wjy1/yalov_ftddddd_yet_another_list_of_videos_for_the/ https://old.reddit.com/r/infinitypool/comments/v5wjy1/yalov_... related concerns since before I was born, back in 1978. Not exactly related to whistleblowing, but practically connectable dots to due diligencely investigative journalistly potentially map out understanding the complexity of things that relate to noticeable increase in SEC whistleblower reportings.
- ahtihn 4y agoWhy would you link to discussions in subs filled with financially illiterate cultists? Why would that be interesting for anyone sane?
- thorncorona 4y agoAs bad as those subreddits are, they did have a point that people were taking positions in undetectable ways, as Bill Huang so helpfully pointed out. Perhaps some of their other points may bear fruit.
- MarkMc 4y agoI love the smart use of incentives this story highlights. But it doesn't go far enough: IRS and SEC agents should be allowed to audit any company with revenue over $5 million per annum - if the audit results in a fine of at least $500,000 then the agent gets a $100,000 bonus. Conversely if the audit doesn't result in a large fine, the agent has his or her bonus pool reduced by $10,000. This would provide a great incentive to weed out people who cheat the system.