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SEC Releases Initial Report on the Dodd-Frank Whistleblower Program

Even thought the SEC's final regulations for the Dodd-Frank whistleblower program just became effective on August 12, 2011, the agency has already filed its first report on the whistleblower program. Under Section 924(d) of the Dodd Frank Act, the SEC must report annually to Congress on its activities...

SEC’s Whistleblower Annual Report

Dodd-Frank added Exchange Act Section 21F(g)(5) and requires that SEC's Office of the Whistleblower to report to Congress annually on the whistleblower program. It's due each October 30. I'm sure the SEC wanted to be in compliance, so they released the first annual report on the Dodd...

Morrison Foerster-One Down, One to Go: The SEC Completes the First Required Dodd-Frank Act Regulation D Rulemaking

The Securities and Exchange Commission (the "SEC") recently completed the first of two Regulation D rulemakings mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"). The Dodd-Frank Act modified the net worth standard included in...

This Week In Securities Litigation (Week ending June 30, 2012)

There were news reports this week that Ponzi king Bernard Madoff's brother, Peter, has agreed to plead guilty to criminal charges that will land him in jail for ten years. At the same time the NY AG settled a case against a the operator of Madoff feeder funds, making a significant recovery for investors...

Morrison & Foerster: Securitization Reform

Since enactment of the Dodd-Frank Act, the most talked-about piece of securitization reform remains in the proposal phase. The proposed credit risk retention rule mandated under the Act has yet to be finalized. Most commenters believe that the risk retention rule will be re-proposed, given the controversy...

Big Bank Litigation: Barclays Libor Scandal Securities Suit Filed and Other Financial Institution Litigation Developments

At the PLUS D&O Symposium in New York this past March, I participated on a panel entitled, "Financial Institutions Underwriting: Is it Safe to Come Out Yet?" The implication of the panel topic was that perhaps with the passage of the credit crisis, financial institutions might not be as...

This Week In Securities Litigation (Week ending July 20, 2012)

The Commission entered into another deferred prosecution agreement this week while filing four settled market crisis actions. The agency also brought an unusual insider trading case centered on selling shares in a secondary offering and an accounting action against a consulting firm that had to restate...

SEC and CFTC Propose Identity Theft Red Flag Rules

by Andras P. Teleki This EIA focuses on the SEC version of the Red Flag Rules. The SEC version of the Red Flag Rules will be known as Regulation S-ID and would be added after Regulations S-P and S-AM when codified. Excerpt: On March 6, 2012, the SEC and CFTC jointly proposed rules (the "Proposal"...

This Week In Securities Litigation (Week ending October 26, 2012)

The focus this week was on white collar criminal securities cases. First, Rajat Gjupta, the former Goldman Sachs director convicted of passing confidential information to former hedge fund mogul Raja Rajartnam was sentenced. Second, Mr. Rajartnam's appeal of his conviction on insider trading and...

Will Obstacles Deter the SEC's Dodd-Frank Whistleblower Program?

Whistleblower information may be one of the SEC's "most effective weapons in its new enforcement arsenal," but the agency's whistleblower program "faces challenges on many fronts," according to an April 23, 2013 New York Times Dealbook article entitled "Hazy Future...

SEC Implements the “Bad Actor” Disqualification Provisions of Dodd-Frank

Previously, I summarized the Securities and Exchange Commission’s implementing regulations of Title II of the JOBS Act , lifting the ban on general solicitation for offerings exempt under Rule 506 of Regulation D, which were finalized on July 10, 2013. At the same meeting, the SEC also finalized...

The SEC's Proposed Pay Ratio Disclosure Requirements: Another Fine Mess

Among the many measures Congress included when it enacted the sweeping Dodd-Frank Act in 2010 was a provision directing the SEC to require companies to disclose the ratio of CEO compensation to median employee compensation. The statutory provision, incorporated into Section 953(b) of the Act, reflected...

Has the Whistleblower Moment Arrived? SEC Awards Whistleblower More Than $14 Million

It is not the first whistleblower award under the Dodd Frank Act’s whistleblower bounty program but the “more than $14 million” award to an anonymous whistleblower that the SEC announced on October 1, 2013 is by far the largest so far. The size of the award raises the question of what...

Whistleblower Report Follow-On Securities Suit: We'll Be Seeing More of These

On October 30, 2013, the SEC announced another whistleblower bounty award under the Dodd-Frank whistleblower program. Although the size of this latest award ($150,000) is relatively modest compared to the recent $14 million award (about which refer here ), the most recent award does suggest that awards...

SEC Releases Fiscal 2013 Whistleblower Report

Whistleblower reports to the SEC continued to rise during the latest fiscal year, according to the agency’s annual Dodd-Frank Whistleblower Program report to Congress. According to the November 15, 2013 report, a copy of which can be found here , there were 3,238 whistleblower reports to the SEC...

Conflicts at Fund Adviser Yields First SEC Whistleblower Action

The Commission brought its first action involving the anti-retaliation provisions of the Dodd-Frank Act. It centers on an investment adviser, a broker dealer, conflicts and retaliation against a firm employee who reported the misconduct to the SEC and later informed his employer of that report. In the...

SEC Announces Largest Yet Whistleblower Bounty Award of Over $30 Million

In what is by far the largest whistleblower bounty award yet under the Dodd-Frank’s whistleblower provisions, the SEC on September 22, 2014 announced an award of between $30 and $35 million to a whistleblower who provided original information that led to a successful SEC enforcement action. In...

SEC: Number of Whistleblower Reports Continues to Increase

The number of whistleblower reports to the SEC increased again in the latest fiscal year, according to the annual report of the SEC whistleblower office. The report, which the SEC is required by the Dodd-Frank Act to provide to Congress annually, is entitled the “2014 Annual Report to Congress...

SEC: Whistleblower Protections Extend to Those Who Report Internally

A critical component of the SEC’s whistleblower program is the anti-retaliatory provisions of Exchange Act Section 21F, added to the statute by the Dodd-Frank Act. To implement that provision the Commission promulgated two rules. The first, Exchange Act Rule 21F-2(b)(2) provides that the agency...

The SEC’s New Whistleblower Action: Is It Counterproductive?

The SEC brought its first enforcement action centered on corporate restrictions which could impact employee whistleblowers, deterring them from reporting to the agency. Specifically, the Commission alleged that a policy at KBR, Inc. which precluded the disclosure of information by an employee about that...

SEC Halts “Smart Contract” Exchange Built on Silicon Valley Start-Ups

Two entrepreneurs wanted to create a business that centered on valuing private start-up companies. They experimented with models that began with a variation of “fantasy sports,” changed to a contest and became a game. It ended with one which involved securities based swaps sold in violation...

Is the Dodd-Frank Whistleblower Bounty Program Gaining Momentum?

While the SEC’s Dodd-Frank whistleblower program has drawn significant attention, the fact is that the program has gotten off to a slow start. As of the end of the last fiscal year, the SEC had during the program’s history received a total of 10,193 whistleblower reports, but had made only...

SEC Commissioner Gallagher on Dodd-Frank and Staff Divisions

SEC Commissioner Daniel Gallagher provided something of a score card for activities over the past five years he has served on the agency prior to his impending departure. To the surprise of few he panned the Dodd-Frank and the FSOC while giving the staff divisions mixed reviews. “Dodd-Frank at...

SEC Enjoined For Failing to Timely Issue Mineral Disclosure Rule

The Dodd-Frank Wall Street Reform Act imposed a requirement on the SEC in Section 1504 to promulgate a disclosure rule regarding certain extraction payments involving resource issuers within 270 days of passage or by April 17, 2011. The history of the Commission’s efforts in this area is riddled...

The SEC, Second Circuit, and Whistleblowers: Searching For Ambiguity

The SEC’s interpretation of the Dodd-Frank whistleblower provisions prevailed in a recent Second Circuit decision, creating a circuit split that could be heading for the Supreme Court. Specifically, the Circuit Court deferred to the SEC’s interpretation of the provisions under which whistleblowers...