Do I have a Case?

Do I Have a Case?

Report: Whistleblower awards delayed by SEC backlog

Whistleblower qui tam claims backlog could discourage future tips

Business CoachA recent article by journalists Rachel Louise Ensign and Jean Eaglesham of The Wall Street Journal highlighted potentially serious delays plaguing the Security and Exchange Commission's (SEC) award system for whistleblowers.  According to article, an estimated 247 (83%) of the 297 award claims filed since 2011 are awaiting a decision by the SEC.  Some legal professionals fear the delays could jeopardize the SEC whistleblower program’s effectiveness at exposing securities fraud.

Under provisions of the 2010 Dodd-Frank financial reform law, tipsters alerting the SEC of securities fraud like insider trading, boiler rooms, and Ponzi schemes are eligible to receive as much as 30% of financial penalties over $1 million collected by the SEC.  The Wall Street Journal reports the number of rewards issued by the SEC has steadily increased every year since the Dodd-Frank Law was adopted in 2010 and the SEC has initiated over 600 investigations into alleged securities violations.

The Dodd-Frank financial reform law was passed in 2010 as a response to the Ponzi scheme perpetrated by Bernie Madoff that defrauded investors out of billions of dollars over the course of decades.  The SEC and regulators were sharply criticized for their failures to act on information about the Madoff ponzi scheme.

Hundreds of claims await decision by SEC

While the SEC has publicized the $50 million it has paid out to whistleblowers, there remains hundreds who await a decision on their claim.  Some whistleblowers who filed a reward claim to have been waiting for more than two years to hear from the SEC, according to The Wall Street Journal.

The SEC has no formal timetable on when rulings must be made on whistleblower claims, according to the report.  The SEC’s enforcement director Andrew Ceresney is quoted as saying that the SEC is committed to a timely ruling on whistleblower claims, but that many SEC whistleblower cases deal with unique and complex issues and must be thoroughly analyzed before any dispersal of rewards.  SEC officials have reportedly begun to inquire about delays caused by the backlog of claims.


Stay informed with our most recent news, events and employment opportunities.
Group Recommend
Contact Us
1666 K Street NW
Suite 1150
Washington, DC 20006
Have a question?
Get in Touch.
The Cochran Firm handles Medical Malpractice, Catastrophic Personal Injuries, Motor Vehicle Accidents & Wrongful Death Claims for clients throughout the United States of America. The information on this website does not constitute legal advice nor form an attorney-client relationship. Please contact The Cochran Firm today to schedule a free consultation.
© 2024 Copyright The Cochran Firm DC.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram