This year’s Symposium will be available either in-person or online on Wednesday, March 13, starting at 815 am EDT.  It offers 7.5 CLE hours, including 1 Ethics hour and 4 Trial Practice hours. Cost is $279.  

You can register (and see the full Agenda) here: atlantabar.org/….   Topics include: 

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Turning to IRS violations, this WSJ article addresses in part why, “[o]n its 2007 return, Ensign Peak put down ‘1,000,000’ for its total assets. The real number was about $38 billion, an Ensign Peak document shows.”

To quote the Journal:

The post Wall Street Journal Begins Examining IRS Violations Exposed by Mormon Whistleblower Regarding Ensign Peak Advisors, Inc. appeared first on Whistleblower Lawyer Blog.

• The SEC Whistleblower Reform Act of 2023, co-sponsored by Sens. Grassley, Warren, Collins, Warnock, and Mastro, removes some predictable roadblocks to an effective SEC Whistleblower program.  To summarize from Sen. Grassley’s release, the Act would:
  1. Protect whistleblowers from retaliation if they report violations only in the workplace.  Currently, whistleblowers are protected only once they report misconduct directly to the SEC or certain other officials.

The post Amid Bank Bailouts, SEC Whistleblower Improvements Urged by Senators Grassley & Warren appeared first on Whistleblower Lawyer Blog.

Whistleblowers are critical to the SEC’s efforts to stop COVID-19 fraud.  The SEC Office of the Whistleblower is authorized to pay monetary awards to whistleblowers whose information leads to an order of sanctions of $1 million or more.

Our firm’s lawyers are uniquely suited to bring attention to meritorious SEC whistleblower claims.  Our firm has the only former Senior Officer and Regional Director of the SEC who represents SEC whistleblowers, Walter Jospin.  We have the ability and experience to evaluate a potential Whistleblower claim and determine if it will interest the SEC Division of Enforcement.  If it does not, the case is lost.  Few lawyers have that experience.

The post SEC Targets COVID-19 Fraud, and Its Success Will Depend on SEC Whistleblowers appeared first on Whistleblower Lawyer Blog.

Today, SEC Director of Enforcement Robert Khuzami and Assistant Attorney General Lanny Breuer released the “Resource Guide to the U.S. Foreign Corrupt Practices Act.” They describe the Guide as “a unprecedented undertaking by DOJ and SEC to provide the public with detailed information about our FCPA enforcement approach and priorities.”

FCPA investigations have increased significantly in the past few years, and the dollar amount of these cases is often quite large. FCPA cases brought by SEC whistleblowers will only add to amount of FCPA violations uncovered.

The Guide is a primer on the FCPA. The SEC and DOJ have attempted to summarize “who and what is covered by the FCPA’s anti-bribery and accounting provisions; the definition of a ‘foreign official’; what constitute proper and improper gifts, travel and entertainment expenses; the nature of facilitating payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; and the different types of civil and criminal resolutions available in the FCPA context.”

Chapter 3 describes the accounting provisions over which the SEC has authority. When a defendant pays commercial bribes to foreign officials, the offending companies often disguise the payments through false accounting entries. The FCPA creates civil liability for such violations of the Act’s “books and records” provision.

The FCPA’s “internal controls” provision is also important, as it requires that issuers devise and maintain a system of internal accounting controls to assure management’s control,authority, and responsibility over the firm’s assets.

The Guide should prove helpful not only to companies that wish to comly with the law, but also to potential SEC whistleblowers with knowledge of possible FCPA violations.

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Never mind that the vast majority of whistleblowers have always raised concerns about illegal conduct internally before reporting to the government. Whistleblower lawyers already knew that fact from twenty-five years of experience with the False Claims Act–the nation’s major qui tam whistleblower law that inspired the new SEC Whistleblower Program. The availability of rewards had not dissuaded whistleblowers from reporting their concerns internally for a quarter century.

When I met in 2011 with SEC Chairman Mary Schapiro and the other SEC Commissioners with other whistleblower advocates to discuss the proposed SEC Whistleblower rules, it was apparent–and shocking–that this false argument was being considered seriously. We urged the SEC to rely on these years of experience with the False Claims Act and to reject any such requirement.

The post SEC Whistleblower Rules Have It Right: Report Shows Most Whistleblowers Report Internally First appeared first on Whistleblower Lawyer Blog.

The alternative pushed by business would have required all CFTC whistleblowers first to risk career suicide by reporting the boss’s wrongdoing to the boss himself.

Industry’s approach would have made the Commission the laughing stock of law enforcement, since no rational person with a career and a mortgage would risk reporting even major fraud with that requirement.

Fortunately, the CFTC put first its responsibility to protect the public, and is taking seriously its law enforcement duties by seeking to root out major frauds.

Madoff, Stanford, and the other major frauds of the past decade prove that internal compliance programs cannot protect the public. That is why Congress in Dodd-Frank demanded the first meaningful SEC and CFTC whistleblower programs.

We applaud the CFTC on this important stand, and look forward to reviewing the text of the final rules when made available.

Based on our firm’s experience in representing whistleblowers, the Senate Banking Committee staff contacted our firm for input on how the new SEC and CFTC whistleblower provisions of the July 2010 Dodd-Frank Financial Reform Act should work. We urged that the Senate strengthen the weak House version of the bill, which provided no meaningful rewards to whistleblowers, in favor of an enforceable right for SEC and CFTC whistleblowers to a significant reward.

Fortunately, that approach is now the law under Dodd-Frank.

We also met with each SEC Commissioner and representatives of the CFTC to recommend strong whistleblower rules to promote the purposes of Dodd-Frank.

We are currently working on select Dodd-Frank whistleblower matters involving SEC whistleblowers and CFTC whistleblowers, as well as our False Claims Act and IRS whistleblower cases. Those cases include a growing area of enforcement, bribery of foreign government officials and other violations of the Foreign Corrupt Practices Act (FCPA).

For a free consultation about a whistleblower case, please call us at 800-228-9159, or click here to contact us by email.

The post CFTC Announces Final Whistleblower Rules, Rejects “Mandatory Internal Reporting” by Whistleblowers appeared first on Whistleblower Lawyer Blog.

This past week, the SEC filed and settled an FCPA case against Armor Holdings, Inc., and collected more than $5.6 million, while the Department of Justice added almost $10.3 million in criminal fines.

The SEC charged that Armor Holdings, Inc. engaged in a bribery scheme to sell body armor to U.N. peacekeeping missions. The Commission also alleged that Armor Holdings violated the federal securities laws’ books and records and internal controls provisions by failing to account properly for commissions in 2001-2007.

Demonstrating the SEC’s increased emphasis on FCPA enforcement, this case is one of 32 FCPA cases the Commission has filed since 2010. Bribery of foreign government officials for business is having increased repercussions.

According to the SEC’s Complaint, through a U.K. subsidiary Armor Holdings paid more than $200,000 through an intermediary to a United Nations official who could send it business, and used a sham consulting agreement to disguise its actions. The result was more than $7 million in additional revenues, and more than $1.5 million in additional profits, according to the SEC.

An Armor Holdings subsidiary allegedly failed to disclose in its books and records some $4 million in commissions, even after being warned by its accountants. .

According to the SEC, Armor Holdings violated Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934.

If the court approves the settlement, Armor Holdings will consent to a permanent injunction prohibiting future violations, and will pay disgorgement of more than $1.5 million, prejudgment interest of more than $450,000, and a civil penalty of more than $3.6 million. The company’s FCPA compliance program apparently will add new obligations. The SEC stated that the company cooperated with its inquiry.

Many more FCPA cases are expected, as the SEC Whistleblower Office (which opened for business last week) will undoubtedly continue to receive credible information about bribery of foreign government officials, and corresponding violations of the books and records provisions of the federal securities laws.

The post SEC Charges FCPA Bribery Scheme–Feds Collect $15 Million appeared first on Whistleblower Lawyer Blog.

We have followed the SEC rules’ development, after being part of the small group of pro-whistleblower attorneys who met with the Commissioners and staff and urged changes to the draft rules to make them effective.

In January, I had the opportunity to visit with SEC Chairman Mary Schapiro, Director Khuzami, and SEC staff, and then separately with Commissioners Luis A. Aguilar, Kathleen L. Casey, Troy A. Paredes, and Elisse B. Walter, to discuss changes to the proposed rules for the new SEC Whistleblower program.

The post Why the SEC Whistleblower Rules Show A New Seriousness About Using Valuable Whistleblower Information appeared first on Whistleblower Lawyer Blog.

Today, the SEC took a major step in announcing the first head of the nascent SEC Whistleblower Office: Sean McKessy, a former Senior Counsel in the SEC’s Division of Enforcement from 1997 to 2000.

According to the SEC’s announcement, “Mr. McKessy served as corporate secretary for both Altria Group, Inc. and AOL Inc., and as securities counsel for Caterpillar, Inc. In these roles, Mr. McKessy developed and supervised internal compliance and reporting programs related to the federal securities laws, served as corporate compliance officer, and coordinated the reporting of potential violations to boards of directors.”

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