Does the SEC Give Rewards for Reporting Money Laundering?

All around the world, large sums of money are being made through corruption and illegal activities. The perpetrators try to hide their wealth by making these seem like legitimate assets. They do everything in their power to evade law enforcement agencies so that they can continue making profits. Authorities, on the other hand, use a number of strategies to catch them and stop their operations. One of these is the acceptance of tips that could help them find and pin down suspects. The Securities and Exchange Commission or SEC is among the leading agencies in this fight.

The SEC Whistleblower Program

Does the SEC give rewards for reporting money laundering? Unfortunately, they do not. But they have a program in place that awards whistleblowers for their efforts in reporting securities law violations. If money laundering is rampant at a company, it’s likely that there are other violations, potentially including violations of securities laws.

Congress spearheaded the creation of the program in order to help the commission do its job. The hope is that the monetary incentives will convince individuals with insider knowledge to come forward and provide information. The SEC is particularly interested in learning about violations of federal securities laws. Whistleblowers can get around 10 to 30% of the monetary sanctions imposed by the authorities. They are also protected from the retaliation of their employers.

Whistleblower Eligibility

There are strict rules for eligibility to the program. Persons must provide original information to the SEC voluntarily. This must pertain to a violation of federal securities law that already happened, is happening, or is about to happen. This information should produce a successful action by the SEC and trigger monetary sanctions greater than a million dollars. Whistleblowers must be individuals or groups of people. Organizations and companies are ineligible. Both employees and non-employees can provide details of a company’s activities. Whistleblowers must follow a specific format and process as defined by the SEC rules.

Submission of Information

The commission is looking for tips that are timely, credible, and specific. They need information that can actually lead them to the individuals who are behind the schemes. They want specific examples of fraudulent transactions. Note that they can only act on cases that are covered by federal security laws. Those that fall outside of their scope should be referred to the appropriate agency. Examples of the types of cases that they handle are Ponzi schemes, theft of funds, rice manipulation, inside trading, unregistered securities offering, misleading financial statements, naked short selling, and bribery of foreign officials.

Factors Affecting the Award Amount

The actual amount of the award given to whistleblowers will depend on several factors. These include the significance of the information provided, the extent of assistance given to the investigators, and the individual’s level of participation in internal compliance systems. The amount may be reduced if the whistleblower is found to be a participant in the illegal activities, has interfered with the internal compliance systems, or has unreasonable delayed the reporting of the violations. For more information about the program, talk to a SEC whistleblower attorney. Schedule a meeting to discuss the facts of the case and explore your options.

LINKS:

https://en.wikipedia.org/wiki/Money_laundering

https://www.sec.gov/whistleblower/frequently-asked-questions