The securities exchange commission has awarded more than 17 million dollars to a whistleblower who was represented by Labaton LLP. The law firm was established to exclusively represent whistleblowers that represented wrongdoings in the securities exchange world. This is the second largest award that the program has received since it was established in 2010.
The program is organized such that when a whistleblower reports information and enforcement action is successfully performed; the whistleblower gets up to 30 percent of the money collected as a result. This move was made to encourage more people to come forward and report economic crimes of this nature.
The whistleblower that was represented by Labaton Sucharow gave detailed and accurate information about a major player in the financial market. The information led to sanctions being made against the fraudulent dealer. The whistleblower however, opted to remain anonymous because he did not want to be blacklisted or to receive any retaliation for reporting the errant firm. The commission is also not allowed to tell about the specific cases that involved the whistleblowers. This is because doing so would indirectly reveal the identity of the person who gave away the information which can also lead to blacklisting from the markets.
The firms representative said that their client did the noble thing by blowing the whistle on a situation where all the other players seemed okay with keeping quiet and watching their customers get harmed as a result of the greed of a few. He stated that he expected that in the future, many of the cases that they would receive would be from bold whistle blowers and that things were just starting to get better.
The client who blew the whistle was represented by the firm at the award ceremony. In addition to this award, the representative also filed a case against the defendant for retaliating against the client because they had been reported. In order to make sure that the award system for the whistleblowers keeps operating, the congress created a replenishing protection fund. The fund currently has a balance of about 400 million US dollars.
The two legislations that have made these events possible were the Dodd-Frank Wall Street reform and the consumer protection act. These are also the two legislations that the SEC acts under. While many law firms just have a division where the cases of such nature can be reported, Labaton Sucharow decided to make these cases their business.
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