Financial Fraud Whistleblowing

Blowing the whistle and reporting illicit financial activity to the authorities is not only the right thing to do morally – financially it can pay off big time for whistleblowers, too. The Securities Exchange Commission (SEC) counts on whistleblowers to tip them off to seedy financial activities, and is willing to healthily compensate those that do. If you suspect that financial fraud is occurring at your place of employment or by somebody you know, contact a white collar crime lawyer at Altman & Altman LLP right away.

No two whistleblowing cases are the same, however any individual who successfully leads the SEC to bring actionable charges – usually a monetary fine – against an individual or corporate entity is entitled to up to 30 percent of the monetary value of what is recovered by that action. When dealing with large-scale financial crimes, a 30-percent award amounts to a lot of money.

Not all whistleblowing cases will leave the whistleblower eligible for financial compensation, however. Only in the following scenario is financial compensation a possibility:

• The whistleblower tips off authorities to a case of financial fraud they weren’t otherwise aware of, or provides information that wasn’t known before that leads to an actionable case against the perpetrator
• The whistleblower provides information the authorities did not already have access to through public sources, such as the media
• The whistleblower’s information leads to a penalty against the perpetrator of at least (or in excess of) $1 million

As with any whistleblowing case, prospective whistleblowers are likely nervous about calling in the authorities out of fear of what could happen to them if their employer or other guilty parties find out that they plan to expose their wrongdoing. Thankfully, due to the 2010 Dodd Frank Wall Street Reform and Consumer Protection Act (known simply as the Dodd-Frank Act), whistleblowers enjoy certain protections in order to encourage them to do the right thing without that fear.

In certain cases, especially depending on the sensitivity and gravity of the case, the Dodd-Frank Act allows whistleblowers to report on financial crimes under the protection of anonymity – with the whistleblower acting through legal counsel and keeping their name out of the case entirely. This can encourage whistleblowers to come forward with their information as it assures they won’t be singled out for retaliation, face termination at their place of employment or face other nefarious threats from those worried about being exposed.

At its simplest, financial fraud constitutes any activity where falsified financial information is utilized in an official capacity. This could be to mislead the public, mislead the government, alter stock implications on the stock market or to secure a more favorable tax bracket for a business. It can involve fabricating streams of revenue (fake invoices or billing), fabricating the time frame in which revenue was received for better tax purposes (revenue timing schemes) or purposefully withholding known liabilities from a financial report to improve the appearance of the company’s profitability.

Financial fraud crimes can be easily hidden, especially if high ranking members of a business are all in on the scheme together. Sometimes, an employee may be worried if they don’t go along with a financial scheme, their positions may be jeopardized. However, these are the scenarios where one should contact an attorney well-versed in financial fraud right away.

The attorneys at Altman & Altman LLP have over 50 years of experience assisting clients in all conceivable areas of the law throughout Cambridge, the Greater Boston Area and all around Massachusetts. We will be able to determine if financial fraud is occurring and help you go through the lengthy process of filing an official whistleblower claim through the SEC, IRS or whichever federal entity should be brought in. We can also help you remain anonymous depending on the type of case.

Contact us online or call for a free consultation to go over the details of your case today at 617-492-3000 or toll-free at 800-481-6199. We are available 24/7.