Category: Blog

If you are considering becoming a whistleblower, there are several things you should know to prepare yourself to report on securities violations. Blowing the whistle is the right thing to do, but that doesn’t mean it can’t come with serious risks.

One of the biggest risks whistleblowers take is retaliation by their employer, who suspects them of reporting information to the SEC. For this reason, the SEC allows would-be whistleblowers to remain anonymous when providing tips that could have devastating consequences to their lives.

Below, we discuss the types of retaliation that are frequently seen by whistleblowers across the country, plus how you can go about protecting your identity.

Whistleblowers and Retaliation

One of the reasons many would-be whistleblowers refrain from coming forward with the information they have is because they are afraid of retaliation. Most often this is because they are employed by the company accused of engaging in securities violations.

You might be wondering whether you have been the target of retaliation, or what constitutes retaliatory action. By law, retaliation is defined as any action taken that has negatively impacted your life after you’ve blown the whistle.

This might include slander, an increasingly hostile work environment, harassment, demotion, termination, intimidation or any other action taken against you when you try to put a stop to fraudulent activities.

For example, let’s say you attempted to bring your concerns to your company’s internal compliance program and were subsequently terminated. Anonymity could have prevented this retaliation. Furthermore, you might have the opportunity to hold your employer accountable their retaliatory acts.

How to Protect Your Identity

The SEC recognizes that the risk of retaliation is great, particularly in situations where employees of corporations have already made an attempt to report their findings to the company’s internal compliance program.

Because of this, the SEC has taken steps to protect these whistleblowers by allowing them to tip off the SEC anonymously when they are represented by an attorney.

The SEC won’t become aware of your identity unless or until it is time to issue you an award, at which point, of course, your identity becomes necessary to receive the award. It’s worth noting that the SEC won’t disclose your identity to anyone unless it becomes necessary, by law, to do so.

In addition, should your employer suspect that you’ve blown the whistle and retaliates against you for doing so, you can bring a claim against them, per the Whistleblower Protection Act.

You might also bring a wrongful termination claim against your employer, which will allow you to recover compensation for any losses you endured as a result of losing your job. Finally, the SEC will impose sanctions against a company who retaliates against a whistleblowing employee.

Schedule Your Confidential Tip Evaluation

When you’re ready to blow the whistle on securities fraud, but you want to make sure that your identity is protected, work with a qualified SEC whistleblower lawyer at Meissner Associates. We’ll work to protect your right to anonymity when tipping off the SEC.

We offer all prospective whistleblowers a confidential tip evaluation to determine what your next steps should be. Schedule yours today by calling 1-866-764-3100 or by submitting the secure contact form we’ve provided at the bottom of this page.

Corporations and other publicly traded companies often include social responsibilities, or a way of giving back to society after earning a profit. Oftentimes, investors will choose which businesses they invest with based on what their social responsibilities are. In this way, whistleblowing does become a social responsibility.

Whistleblowers are critical to ensuring that corporations follow federal securities laws and uphold the standards they’ve portrayed to their investors. When a corporate insider reveals fraudulent activity, it can have a direct impact on social responsible investing and help investors or companies ensure that their business ventures remain dedicated to the civic duties they’ve committed to.

Social Responsibility in Publicly Traded Companies

An excellent way of understanding social responsibility in publicly traded corporations is to examine a large company such as General Electric. GE’s corporate social responsibility (CSR) page includes initiatives they are capitalizing on and who these social responsibilities will benefit, including stakeholders, investors, employees, customers, and the environment.

Some of these initiatives include the GE Ecomagination strategy, which is meant to reduce the company’s environmental impact and help it to become more sustainable, and the GE Foundation, which works with HR management programs that provide education regarding human rights, health, and employment principles in a number of different sustainability industries.

For investors who choose their investment opportunities with corporate social responsibilities in mind, businesses that strongly outline their initiatives, while also upholding these beliefs and strategies, are more likely to be successful.

What Happens When Corporations Fail to Uphold Their Obligations?

The United States Securities and Exchange Commission (SEC) has developed a whistleblower program through which would-be whistleblowers can report fraudulent activity to the SEC and potentially win an award if their tip meets the eligibility requirements.

When whistleblowers report that a corporation hasn’t been upholding their CSR obligations, typically by deceiving investors who chose to invest based on the company’s social responsibilities, the investor’s funds can be protected and the corporation will be expected to maintain the validity of their social responsibilities.

If a corporation is found to have failed to maintain their social responsibility commitments, the risks are high. The company’s stock value could fall, they could lose potential new investors, investor confidence could plummet, and the corporation could lose all consumer trust.

How Whistleblowers Impact Social Responsibility

Whistleblowers coming forward with information regarding these violations are one of the most important tools to discovering this form of fraudulent activity.

Corporate insiders should be expected to follow the obligations of their company’s social responsibilities. This includes holding their company accountable for their CSRs, which is why whistleblowing itself is considered to be a social responsibility.

Failing to follow a corporation’s social obligations can impact investors and the public, result in hefty penalties for those found responsible for the violations, and yield substantial whistleblower awards through the SEC whistleblower program.

Many would-be whistleblowers refrain from reporting tips even though they are aware of the violations due to the very real fear of retaliation. Fortunately, there are many whistleblower protections available that can allow you to report your tips with confidence.

Speak with an SEC Whistleblower Lawyer

Whistleblowers and exposing social responsibility commitments that aren’t being upheld are of significant importance. Potential whistleblowers should consider this information a social responsibility in and of itself.

If you are interested in reporting your tips to the SEC, get in touch with a skilled SEC whistleblower lawyer at Meissner Associates today. Doing so could result in a substantial whistleblower award. You can schedule your confidential tip evaluation by filling out the secure contact form below or by giving our office a call at 1-866-764-3100.

The United States uses a system known as “generally accepted accounting principles,” or GAAP, as the standard for financial reporting of businesses across the country. GAAP includes reporting standards and principles when compiling important financial statements.

Non-GAAP accounting becomes an issue with the SEC when companies begin fraudulently manipulating financial documents they present to their potential investors. The requirements of GAAP are rigid, and critics have pointed out that in many cases, GAAP financial reports don’t accurately reflect a company’s performance.

Companies are resorting to using non-GAAP—also known as pro forma—numbers to adjust their financial statements to demonstrate their financial position.

Why Non-GAAP Numbers Are an Issue

The problem with companies using non-GAAP numbers is that they often paint a picture of a company doing better financially than it actually is. This misleads investors into thinking that their investment is in a “safer” position than it might actually be.

Because publicly traded companies’ use of non-GAAP numbers has been on the rise, more investors are being deceived about the successes or failures of the companies they are investing in or considering investing in.

Although non-GAAP numbers can be useful in describing large, one-time expenses so that the investor has a more realistic idea of the company’s financial earnings, some companies are adjusting their earnings to unrealistic levels.

Red flags that demonstrate a business is using non-GAAP numbers could be the omission of stock-based compensation and restructuring costs in their financial statements, as well as a focus on adjusted per-share earnings.

As the SEC opens more and more investigations into businesses that use non-GAAP accounting practices, the number of SEC whistleblower awards related to this conduct is likely to soar.

Reporting to the SEC Can Get You a Whistleblower Reward

Many would-be whistleblowers are leery about moving forward with blowing the whistle on fraudulent non-GAAP accounting due to the fear of retaliation.

Businesses often do retaliate against suspected whistleblowers by terminating, harassing, or demoting them or ruining their professional reputation—even though both the Sarbanes-Oxley Act and Dodd-Frank Act contain provisions that explicitly prohibit retaliatory action by employers.

If your employers choose to violate these provisions, we can bring them to court. You could be entitled to reinstatement into your former position, back-pay, and the recovery of other losses you endured.

When you provide a tip to the SEC, you have the potential to win a substantial whistleblower reward. If your tip is original, valuable, and given voluntarily, you’ll have met the initial criteria for a reward.

In addition, the SEC must be able to take enforceable action against the violating company in question, as well as recover a minimum of $1,000,000 in sanctions for you to qualify. Of the recovered sanctions, you will be entitled to between 10 and 30 percent, depending on how valuable your tip was to the success of the SEC’s investigation.

Contact an SEC Whistleblower Lawyer

If you are considering blowing the whistle on a potential securities violation like non-GAAP accounting and are interested in remaining anonymous or need protection from retaliation, get in touch with a qualified SEC whistleblower lawyer at Meissner Associates as soon as possible.

You can schedule your no-obligation tip evaluation today by completing the secure contact form below or by calling our office at 1-866-764-3100.

As cyber-based threats to retail investors become more common, the Securities and Exchange Commission (SEC)is working to fight back against these threats. As part of that effort, the commission recently developed a Cyber Unit.

Digital misconduct can affect retail investors in many serious ways, and the SEC is now prepared to investigate cyber threats and begin detecting them before fraudsters are able to run away with investor funds. Read on to learn more about the SEC’s Cyber Unit.

The Purpose of the Cyber Unit

Those using the Internet to commit fraud are able to hide behind the screen despite being involved in large-scale fraudulent operations.

Securities violations like selling unregistered securities, insider trading, stock manipulation, hacking into retail accounts, and coin pump-and-dump schemes are going to be the primary areas of concern for the SEC’s new investigative unit.

Eliminating ICO and DLT Misconduct

An ICO, or initial coin offering, is an unregulated way to raise funds for cryptocurrencies. Selling virtual currency to investors—such as the successful Filecoin—is very similar to crowdfunding. Programmers don’t have to sell their own stock and are able to avoid regulated sources of capital.

Coins are supposed to have an independent value outside of the virtual world, and there is usually a cap on how many coins will exist, which is why they are so appealing to many new investors.

The difference between cryptocurrencies and stocks is that investors who get in on an ICO do not have any ownership in the company. Stocks, on the other hand, do provide that sense of security. When ICOs do provide ownership, the SEC may require the company to adhere to all securities laws.

Distributed ledger technology (DLT) uses nodes (independent computers) to share, record, and sync transactions electronically, as opposed to a traditional ledger. Because the data here is decentralized, fraudsters are able to capitalize on weaknesses in the various places the data is stored. The SEC Cyber Unit will investigate such misconduct.

How the Cyber Unit Will Fight Back Against Securities Violations

The SEC Cyber Unit will also work to identify large schemes and detect fraudulent activity across the country through data analytics and, of course, technology. It will also focus on developing techniques that address and prevent cyber threats from affecting retail investors.

In addition, the SEC’s newly created Distributed Ledger Technology Working Group will study emerging uses of distributed ledgers within the financial industry in the hope of identifying potential misconduct before fraudsters have the opportunity to take advantage of investors.

Call an SEC Whistleblower Lawyer

If you have information about potential securities violations perpetrated online and are considering blowing the whistle on such misconduct, get in touch with a qualified SEC whistleblower lawyer at Meissner Associates today.

You can schedule your confidential tip evaluation by giving our office a call at 1-866-764-3100 or filling out the secure contact form we’ve provided below.

Reporting tips regarding securities violations is critical to stopping fraudulent activity within financial markets and securities industries. Unfortunately, it can be risky for would-be whistleblowers to provide the information they have to the Securities and Exchange Commission (SEC).

Fortunately, there are protections in place for SEC whistleblowers. If you are interested in becoming a whistleblower, you’ll have the option of remaining anonymous as you provide your tip to the SEC.

Why Remain Anonymous?

The most critical reason that potential whistleblowers want to protect their identities is the fear of retaliation by employers. Although the Dodd-Frank and the Sarbanes-Oxley acts both expressly prohibit employers from retaliating against suspected whistleblowers, that doesn’t mean they always obey.

The fears of harassment, demotion, termination, suspension, and even slander are all very real for would-be whistleblowers. Having the protection of remaining anonymous can help you stay confident that those involved in the fraudulent activity won’t learn your identity and make your life difficult.

Report Your Tip Through an Attorney

There are specific requirements—outlined by the SEC and Dodd-Frank—that whistleblowers will need to follow if they hope to remain anonymous. The first of those requirements holds that you must report your tip through an attorney.

You will discuss the information you have with your lawyer first and be informed about what you can expect after you report your tip, as well as be advised as to whether we anticipate that the SEC will be able to successfully investigate and enforce action against the fraudsters. If the SEC achieves this success, you may be eligible for a financial reward.

Then, we will report your tip to the SEC on the condition of anonymity. We will arrange for interviews to be conducted via telephone. If you are going to receive a reward, however, this will change.

Disclosure Upon Disbursement of Your Award

The SEC requires disclosure of the identities of those who receive whistleblower rewards. Although your identity will not be made public, the SEC will need to know who you are in order to issue you the award you deserve.

This won’t occur unless or until the commission is ready to provide your award, however, so you’ll continue to remain completely anonymous throughout the reporting and investigative process.

Consult an SEC Whistleblower Lawyer

When you have information about a possible securities violation within your company and are considering blowing the whistle, contact a qualified SEC whistleblower lawyer at Meissner Associates.  

Our firm can help you report your tip and remain anonymous so you are protected from retaliation and able to maximize your chance of receiving a whistleblower award. Simply fill out the secure contact form below or call our office at 1-866-764-3100 to take advantage of your confidential tip assessment today.