How the Dodd-Frank Wall Street Reform Changed Financial Security Fraud
It wasn’t only a few decades ago where the financial sector in this country was rampant with fraud. There were ponzi schemes of every conceivable size taking place right under the nose of the Securities and Exchange Commission, and the worst part employees were being harassed to keep quiet or they would lose their jobs and face serious repercussions. That all changed in 2010 when the Congress enacted the Dodd-Frank Wall Street Reform to combat financial securities fraud. New whistleblower programs now aimed to crush employers conducting fraud provided employees a safe haven.
Violations to security laws can now be presented to the SEC (Securities and Exchange Commission), and these employees are not only protected, they are getting rewarded financially as well. When the reform was introduced in 2010, the law firm of Labaton Sucharow decided to focus the lion-share of their company efforts on offering these workers a place to consult and expose their employers for fraud. The law firm went on the offensive by bringing in forensic accountants, investigators, and financial analysts, to help support and provide counsel for these whistleblowers.
These employees were being harassed and threatened with loss of job security if they spoke of the fraud being conducted within their organization, and now they had a recourse to those years of challenges. The financial reward being offered to whistleblowers was substantial now, and under the rules of the newly instituted Dodd-Frank Wall Street Reform program, the SEC pays eligible employees 10-30% of monetary sanctions collected when a successful Securities and Exchange Commission enforcement action exceeded $1 million. One reason for the increase in reports against employers was that the Dodd-Frank Act prohibited any retaliation by employers against whistleblowers who reported their concerns to the SEC pursuant to the program rules.
Employers still conducting fraud against the financial sector are looking over their shoulders more carefully now because in the past they were able to use harassing tactics against their employees to turn a blind eye. Now these enormous financial rewards plus the job security make it much easier for employees to anonymously file complaints against employers without having to maintain a stressful relationship with employers. Whistleblowers are able to report securities violations anonymously today when they are professionally represented by a lawyer who specializes in these cases.
Employees who are concerned about issues with securities fraud taking place in the workplace are advised to call an attorney and ask about the SEC Whistleblower Program. During the initial consultation, employees provide identifying information anonymously.