Whistleblower Litigation

SEC Whistleblowers

Hagens Berman represents successful whistleblowers under the SEC whistleblower program—we beat the odds for our clients

Ninety-five percent of whistleblower complaints are not acted upon by the SEC – we represent the other five percent.

Hagens Berman was representing whistleblowers even before the first day that the Securities and Exchange Commission’s Dodd-Frank Whistleblower Program launched in the summer of 2011. In fact, our law firm’s first whistleblower case twice became front-page news in the Wall Street Journal and resulted in the largest fine ever levied against a financial exchange. And our client was deservedly awarded.

Since that time, Hagens Berman’s whistleblower legal team has represented dozens of SEC whistleblowers in cases currently under investigation by SEC Enforcement Division offices across the country.

Unlike most whistleblower practices, many of which have literally no experience litigating securities cases or financial fraud cases at all, Hagens Berman is one of a handful of the top plaintiffs’ and securities litigation firms in the world, and we have been among the most successful and respected in representing SEC whistleblowers. Hagens Berman has the resources and expertise to deftly research, develop and advocate for your SEC whistleblower complaint. Our law firm is renowned for taking on large corporations in financial fraud matters and achieving landmark victories for our clients.  

Our current SEC whistleblower cases run the gamut: they variously allege misrepresentations and omissions in financial filings; accounting fraud; insider trading; market manipulation; market structure and trading violations; pricing fraud; offering fraud; foreign bribery; investment fraud; other various other kinds of securities fraud. 

The responsibilities of an SEC whistleblower are vast and the risks facing a whistleblower are significant. Anyone considering bringing a whistleblower claim to the SEC needs to know the complete set of legal and other ramifications involved, including what protections are available and what the SEC will and will not do to protect you. The whistleblower legal team at Hagens Berman is full of experts on all of these questions and has dealt with all of them before.  

Contact our whistleblower attorneys for a confidential and free consultation today. 

Whistleblowers who speak out and minimize harm to the investing public by filing a complaint with the SEC may receive a reward for blowing the whistle.

If you have information regarding fraud in securities markets, you could be rewarded for reporting it.

Read more about SEC whistleblower guidelines in the SEC Annual Report to Congress on the Dodd-Frank Whistleblower Program (2016) and the SEC Enforcement Manual (2016).

What Types of Fraud Does the SEC Regulate and Invite Whistleblowers to Report On?

Securities fraud—also known as stock or investment fraud—refers broadly to deceptive or otherwise fraudulent behavior as it concerns securities. Securities fraud harms the public in various ways, including by wiping out the life savings of unsuspecting individuals and those who manage their investments. This fraud includes unlawfully inducing investors to purchase or sell stocks or otherwise act on information that is false, often resulting in financial losses.  

Conduct that frequently leads to SEC enforcement actions include bribery and accounting violations of the Foreign Corrupt Practices Act, market manipulation, misrepresentations and omissions in financial filings or otherwise, theft of investor funds, violations of broker-dealer obligations, insider trading, and unlawful marketing and handling of investor funds.

If you think you know of conduct that may constitute securities fraud, you can report it.

Whistleblowers: Do you think you know about illegal securities fraud? Though roughly 65 percent of whistleblowers awarded under the SEC were insiders reporting on their present or former company, about 35 percent of awarded whistleblowers were outsiders with particular expertise and information helpful to the SEC.  Reported conduct includes:

  • Ponzi schemes, in which investors are paid with their own funds or those of other investors, instead of with profits from their investments; and related schemes including overvaluation of assets or other misrepresentations that deceive investors.
  • Trading fraud, including front running, in which a trader (often operating the trading venue itself) is aware of pending customer orders for a security and buys or sells unfairly
  • Accounting fraud reflected in financial statements that misrepresent the financial status and operations of a company
  • Outright theft from investors (embezzlement by stockholders)
  • Pump-and-dump schemes and stock manipulation, including false statements regarding a public company’s financial reports and lying to corporate auditors
  • Mutual fund fraud, which entails deceptive acts that disadvantage customer investors in these funds
  • Insider trading, in which trades are made based on information not disclosed to the public and acquired from a company insider or related party

Note that the SEC has limited resources and can only pursue whistleblower claims that are actionable, timely, clearly-reasoned, and well-presented to the Agency. Of more than 18,000 whistleblower complaints filed with the SEC since 2011 when the program began, less than five percent have made it to the Enforcement Division. The overwhelming majority of complaints go nowhere. In order to properly present a fraud claim to the SEC, a whistleblower needs to make sure that the law firm he or she retains has a well-established reputation of success in securities law and is known as an expert in the area by the SEC.

Securities Whistleblower Rewards and Protections

The Dodd Frank Whistleblower Law is an important tool for securities whistleblowers and the SEC to ensure corporations and others on Wall Street do not commit fraud. On May 25, 2011, the U.S. Securities and Exchange Commission officially implemented new rules that provide incentives as well as protection for whistleblowers who report violations of securities laws.

A person who supplies original information that leads to a success enforcement action by the SEC can receive between 10-30 percent of monetary sanctions if the total recovery exceeds $1 million. SEC whistleblowers may proceed anonymously, and the SEC has gone to great lengths to ensure ongoing protection of that anonymity, even for those whistleblowers who have received substantial awards, and to protect against retaliation. Last year, for example, the SEC brought the first independent case against a company for retaliation against an employee who blew the whistle and reported wrongdoing. 

In the SEC's Annual Report to Congress on the Dodd-Frank Whistleblower Program (2016) the SEC details that 6 of the 10 highest whistleblower awards were paid in 2015 and totaled more than $50 million.

Read more about SEC Whistleblower Rewards and SEC Whistleblower Protections

Hagens Berman's SEC Whistleblower Successes

Our firm, Hagens Berman LLP, has successfully litigated hundreds of cases against our largest companies and several individuals who committed fraud of various kinds. We have litigated significant securities cases for over 20 years. This experience includes cases against such giants as Visa, MasterCard, Charles Schwab, entities implicated by the Madoff Scandal, and other large companies with complex financial instruments and investments, such as mortgage-backed securities.

The cases handled by our firm that involve financial fraud of various sorts have resulted in billions of dollars in settlements and fines against large public and private corporations and other bad actors.

In addition to the firm’s expertise in this area, Hagens Berman has worked alongside government officials and regulators for over 20 years, often retained by those governments, helping our firm establish the credibility necessary to bring important cases to the SEC. When Hagens Berman brings a claim, it gets attention.

Our firm is currently handling several fraud cases on behalf of whistleblowers under both the SEC Whistleblower Program and the CFTC Whistleblower Program.

If you have information regarding fraud in securities markets, you could be rewarded for reporting it.

Becoming an SEC Whistleblower and Choosing a Law Firm

Although federal and state governments do their best to combat securities fraud, securities whistleblowers ensure that financial markets remain stable, efficient and trustworthy. They also allow an investigation and recovery of funds to begin much more quickly by blowing the whistle as soon as suspicious and fraudulent behavior is observed.

In order to properly present a claim to the SEC, a whistleblower needs to select a law firm that understands the complexities of the Securities Exchange Act and SEC Regulations, a firm with a national reputation as a leading law firm and one that will assist you in presenting the most comprehensive, well-researched complaint to an already overworked Agency. Hagens Berman, with years of experience in whistleblower law, antitrust and securities litigation, and other financial-fraud class-action cases, is well-positioned to best present a complaint on your behalf.

Again, less than 5% of SEC complaints make it past the whistleblower office and over to the Enforcement Division for action: we build strong cases with our clients that beat those odds.

Hagens Berman encourages whistleblowers with information regarding fraud in these markets to contact us to discuss your information with our legal team.

Becoming an SEC whistleblower can lead to personal financial rewards, and protection under the SEC’s Whistleblower Law.

If you have information regarding fraud in securities markets, you could be rewarded for reporting it.

Read more about SEC whistleblower guidelines in the SEC Enforcement Manual (Oct 2013).