Abraham, Fruchter, & Twersky LLP

Abraham, & Fruchter, Twersky, LLP

Whistleblower Actions

The United States Federal Government, as well as several State Governments, provide financial incentives and protections to whistleblowers who report wrongdoing to regulatory agencies and aid in the prosecution of fraud.  AF&T assists whistleblowers with the reporting of their claims, as well as obtaining the financial rewards and job protections provided under a number of noteworthy whistleblower statutes.  AF&T helps whistleblowers decide which course of action is most appropriate to advance their own individual interests.

False Claims Act

The False Claims Act, or FCA, 31 U.S.C. §3729, provides a strong financial incentive to anyone who reports a fraud victimizing the government. An individual who provides information or helps participate in the prosecution of fraud against the government is entitled to at least 15-30% of any settlement or recovery by the government, under certain conditions. AF&T helps its clients engage the appropriate government agency and fights for the maximum reward afforded under the law. In addition, in the event that the government decides not to pursue an action for recovery based on the information provided, AF&T represents clients in bringing claims directly on behalf of the government, which allows that individual to receive an even greater share of the recovery. Since 1986, whistleblower-initiated claims under the FCA have recovered over $24 billion.

The Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act, or “Dodd-Frank Act,” was signed into law in July 2010, in response to the financial crisis on Wall Street in 2007 through 2009. As part of sweeping financial and regulatory reform, the Dodd-Frank Act entitles an individual who brings violations of securities and commodities laws to the attention of the SEC and Commodities Futures Trading Commission (CFTC) to a reward of 10-30% of any recovery in excess of $1 million resulting from information that is “derived from the independent knowledge of the whistleblower.” The Dodd-Frank Act also provides substantial protections for whistleblowers to prevent an employer from retaliating against an employee, including a private right of action for double back pay, with interest, and attorney fees. The Dodd-Frank Act, however, does not allow a whistleblower to initiate or continue litigation on behalf of the government if the government declines to participate. AF&T helps individuals properly assess and value evidence of wrongdoing and present such information to the appropriate government agency to ensure a maximum recovery under the law.

The Sarbanes-Oxley Act

The Sarbanes-Oxley Act of 2002, or SOX, was enacted by Congress in reaction to a number of major corporate and accounting scandals at public companies that cost investors billions of dollars. Included in SOX are strong protections against retaliatory actions for whistleblowers who expose accounting fraud at public companies. Under SOX, public companies must establish procedures to allow for confidential reporting of accounting or auditing irregularities, and the companies are prohibited from taking retaliatory action against a whistleblower who has brought wrongdoing to the attention of either a supervisor or a regulatory or law enforcement official. An employee who has been subjected to retaliation is entitled to reinstatement, back pay and legal fees and the perpetrator of the retaliation is subject to criminal penalties of up to 10 years imprisonment. SOX does not provide a financial incentive or reward based on recovery to whistleblowers.

The Securities Exchange Act

The Securities Exchange Act, 15 U.S.C. 78u-1(e), allows the SEC to provide a financial reward to any individual who provides information to the SEC regarding insider trading. However, the decision of whether any reward will be provided is at the discretion of the SEC, and any reward amount is capped at 10% of any recovery. This provision has been rarely utilized by the SEC and very few rewards have been provided to whistleblowers. AF&T has industry-leading experience in handling cases involving insider trading and is able help ensure that information related to insider trading is utilized in the best interests of the informant and harmed investors.

If you wish to speak confidentially to one of our attorneys to report wrongdoing, or would like more information about the protections and potential rewards afforded to whistleblowers who expose fraud, please contact us at 1-800-440-8986, (212) 279-5050 or fraud@aftlaw.com.