What Does a Securities Fraud Whistleblower Report?

The Securities and Exchange Commission (SEC) is tasked with investigating and punishing securities fraud. Because the securities industry is so vast and so complicated, it’s virtually impossible for the SEC to achieve its mission without help. To that end, it relies heavily upon whistleblowers to supply information of fraud so that the SEC can then investigate and determine if misconduct has taken place.

After the Dodd-Frank Act was passed into law, the SEC was granted several incentives with which to reward whistleblowers, making its job substantially easier. Chief among these incentives are powerful legal protections and monetary rewards granted to whistleblowers when their information results in a successful investigation and over $1,000,000 in sanctions.

If you are involved with the securities industry and believe that you have encountered fraud, you might be considering becoming a securities fraud whistleblower but be uncertain as to what sort of information the SEC is interested in. To that end, we’ve supplied several examples of the type of fraud that could result in an SEC investigation:

Insider Trading

Insider trading is a common form of securities fraud that occurs when a company insider makes a securities transaction based on information that is not available to other investors. This information can be passed onto family and friends who then make transactions based on it, but it would still be considered insider trading.


When a securities fraud whistleblower exposes embezzlement, he or she is essentially exposing a form of theft. Embezzlement occurs when someone who has been entrusted with money, assets, or stocks transfers the ownership of a portion to his or herself. This is often done gradually over time to avoid attention.

Ponzi and Pyramid Schemes

These two similar but distinct types of fraud involve conning investors into paying into a system that has either no or little legitimate income. Instead, new investors must constantly be brought into the Ponzi or pyramid scheme in order to maintain it. By exposing this type of scheme, a securities fraud whistleblower can save large amounts of people from losing truly massive amounts of money.

Stock Manipulation

There are a number of different types of market manipulation schemes that fall under this category. What they all have in common is that the price or value of a stock is materially misrepresented in order to fool investors. A stock might be negatively misrepresented in order to temporarily push its cost down so that the fraudster can buy it at a lower price. Alternatively, a stock might be represented as being more valuable than it is, causing the price to temporarily increase so that the fraudster can then sell at an inflated price.

Become a Stock Fraud Whistleblower

Securities fraud can cover a number of other types beyond what’s been detailed here. If you have knowledge of such fraud taking place, Meissner Associates can help you submit an anonymous tip to the SEC so that you can be rewarded for doing the right thing.

To find out if your information could make you eligible to become a securities fraud whistleblower, simply complete the form at the bottom of the page or call 1-866-764-3100 to arrange a free and confidential tip evaluation.