Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.
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SEC Announces Its Largest-Ever Whistleblower Awards
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Re: SEC Announces Its Largest-Ever Whistleblower Awards
#12Whistleblowing can be it's own business model, just do a google search for Ven-a-care. Ven-a-care is a small pharmacy down in the Florida Keys. A few decades ago, it started to notice that the price it was paying for certain drug was very different from what the gov't thought they cost. Gov't price reporting is incredibly strict in pharma due to past mucking with the numbers. So they started a lawsuit which was picke…
It's great that Markopolos has found a way to make his forensic skills pay.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#13Interesting to see the SEC finally grow some teeth, between the recent ICO enforcement actions, Theranos penalty, and now this. When I was in financial software (06-07) they were basically a joke; my employer had developed some software to help enforce a (relatively obscure) regulation and tried to sell it to them, and they were completely indifferent. Kind of a welcome change, if they manage to get people to be more…
"When I was in financial software (06-07) they were basically a joke"
I spent a few weeks causally reading testimony transcripts from the Madoff investigation when these were published by the SEC. The SEC was far worse than a joke. The SEC was an enabler. Years and years of Potemkin audits blessing Madoff and his Ponzi scheme as a worthy investment allowed hundreds of individuals and investors to rationalize their participation in the fiction. Complaints were filed, absurdities were pointed out and the SEC turned a blind eye to it all. By the time the gears finally stripped the SEC had had its nose rubbed in it multiple times.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#14Does anyone know what kind of violations they reported (and which companies)?
Merrill Lynch insiders who supplied information for a 2016 case against Bank of America.
https://www.bloomberg.com/news/articles/2018-03-19/two-whist...
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#15Whistleblowing can be it's own business model, just do a google search for Ven-a-care. Ven-a-care is a small pharmacy down in the Florida Keys. A few decades ago, it started to notice that the price it was paying for certain drug was very different from what the gov't thought they cost. Gov't price reporting is incredibly strict in pharma due to past mucking with the numbers. So they started a lawsuit which was picke…
Bradley Birkenfeld did quite well whistleblowing on UBS [1]. $104m.
https://en.wikipedia.org/wiki/Bradley_Birkenfeld#Whistleblow...
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#16They need to come down on Tesla. Musk's tweets/lies have driven the stock up to an established automaker's market cap.
The only problem is, Tesla is no where near profitable (they've lost money nearly every quarter except for two or three, I believe. And in those quarters, the profit was very small compared to other quarterly losses) as either of these companies, and the cash burn isn't stabilizing as they attempt to scale, it's increasing.
China/Europe deliveries have collapsed to start 2018. Bloomberg is tracking VIN assignments and pegs weekly production to 750 vehicles a week; that's only 25% to what Musk said they'd be doing by 2018.03.30.
S and X production during the M3 ramp up is reduced, based on channel checks.
Deliveries to regions in the US are staggered as M3's require an extensive amount of re-work before and after being received by a customer. Simply put - they want to fulfill all of their California orders to cut down on logistic costs/take payment, but their delivery centers can't handle the amount of service/re-work that would be required for all the new M3 owners.
This quarter should be an absolute bloodbath for TSLA - the end has already begun.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#17Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.
The whistleblower awards are typically a fixed percentage of the fines that the SEC levies (10% - 30% depending on circumstances). So if you blow the whistle on your company and the SEC fines them $100M, the SEC will get ~$80M and the whistleblower will get ~$20M. So in that sense, no, they can never run out of funds to pay them off. https://www.sec.gov/whistleblower
Ah yes. I remember hearing about this now. Thanks!
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#18This program is a great example how setting the right incentives can destabilize a criminal conspiracy. It’s also worth noting that “traditional” law enforcement in white collar crimes is essentially the same: the possibility of criminal proceedings almost always outweighs the sort of incentives a corporation can offer lower-level employees. Would you risk jail time as a bookkeeper earning a 5-figure salary at #bigCo…
Those incentives cut both ways. It also creates a huge avenue for rogue employees to suddenly craft themselves payout strategies.
The law firm that we use recently told about such an action they defended for another client. A disgruntled employee, who suspected they would soon be fired for lack of performance, "setup" certain actions, documents, prompted specific executive responses to emails, etc. The claim was that there was prejudiced hiring practices ongoing. However very little true evidence existed...most of it was in fact crafted by the employee.
The whistleblower action resulted in a meager voluntary fine that the company paid (didn't make financial sense for company to fight, easier to pay the $10K and move on). The ex-employee for their part received $1500. Currently they are in a recovery program for crack addiction.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#19Interesting to see the SEC finally grow some teeth, between the recent ICO enforcement actions, Theranos penalty, and now this. When I was in financial software (06-07) they were basically a joke; my employer had developed some software to help enforce a (relatively obscure) regulation and tried to sell it to them, and they were completely indifferent. Kind of a welcome change, if they manage to get people to be more…
"When I was in financial software (06-07) they were basically a joke" I spent a few weeks causally reading testimony transcripts from the Madoff investigation when these were published by the SEC. The SEC was far worse than a joke. The SEC was an enabler. Years and years of Potemkin audits blessing Madoff and his Ponzi scheme as a worthy investment allowed hundreds of individuals and investors to rationalize their pa…
I recently read a book called The Chickenshit Club that shined a fairly unflattering light on the rationale behind SEC and DOJ cowardice/enabling. I'm not sure that the SEC could have changed overnight, or if they're still going after slam-dunks, and these popular examples just fit the bill.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#20Interesting to see the SEC finally grow some teeth, between the recent ICO enforcement actions, Theranos penalty, and now this. When I was in financial software (06-07) they were basically a joke; my employer had developed some software to help enforce a (relatively obscure) regulation and tried to sell it to them, and they were completely indifferent. Kind of a welcome change, if they manage to get people to be more…
"When I was in financial software (06-07) they were basically a joke" I spent a few weeks causally reading testimony transcripts from the Madoff investigation when these were published by the SEC. The SEC was far worse than a joke. The SEC was an enabler. Years and years of Potemkin audits blessing Madoff and his Ponzi scheme as a worthy investment allowed hundreds of individuals and investors to rationalize their pa…
> The SEC was an enabler. Years and years of Potemkin audits blessing Madoff and his Ponzi scheme as a worthy investment allowed hundreds of individuals and investors to rationalize their participation in the fiction.
This doesn't sound right at all, the SEC doesn't conduct audits. See, for example, [1].
[1] Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme - Public Version https://www.sec.gov/files/oig-509.pdf