SEC Charges Seven Public Companies for Whistleblower Rule Violations
On September 9th, 2024, the Securities and Exchange Commission (SEC) announced that seven public companies are facing sanctions for violation of the securities industry whistleblower laws under the Dodd–Frank Wall Street Reform and Consumer Protection Act. Within this article, our Miami SEC whistleblower protection lawyer discusses the sanctions and the regulations.
Enforcement Action: Companies Will Pay More than $3 Million for Whistleblower Violation
The SEC has confirmed that seven public companies have been cited for violating the whistleblower protection regulations set in place by Dodd-Frank. The seven companies in question have agreed to settle the charges. Notably, the companies will pay more than $3 million in collective financial sanctions. Here is an overview of the fines issues by the SEC:
- Acadia Healthcare Company, Inc: $1,386,000 fine
- Brands Holding Corp: $399,750 fine
- AppFolio, Inc: $692,250 fine
- IDEX Corporation: $75,000 fine
- LSB Industries: $156,000 fine
- Smart for Life, Inc: $19,500 fine
- TransUnion: $312,000 fine
An Overview of Dodd–Frank’s SEC Whistleblower Program
Dodd-Frank was signed into law by President Obama in July of 2010. It is comprehensive legislation that, among other things, created the SEC whistleblower program. The program was created in order to help incentivize people to report suspected violations of federal securities laws to the SEC. It does so by offering monetary rewards and legal protections. Here are four key points that potential whistleblowers should know about the SEC program:
- Monetary Incentives: Whistleblowers are eligible for awards between 10 percent and 30 percent of the monetary sanctions collected when their information leads to successful enforcement actions exceeding $1 million. To qualify, you must voluntarily come forward and provide original information to the SEC that (ultimately) leads to enforcement action.
- Confidentiality Protections: The SEC safeguards the identity of whistleblowers. Indeed, the law allows them to report anonymously through an attorney to prevent potential personal or professional repercussions. You do not have to disclose your identity to the SEC until an award is preliminarily approved. Further, your name and other personal details will never be disclosed to the public.
- Anti-Retaliation Measures: The Dodd–Frank Act prohibits employers from retaliating against employees who provide information to the SEC. Indeed, the law offers clear legal recourse for those who experience adverse actions as a result of their whistleblowing.
- Global Applicability: The program is open to individuals worldwide—not just U.S. citizens or residents. The law recognizes the international scope of modern financial markets and the importance of global cooperation in combating securities fraud. Notably, you do not have to be any employee of any company to be eligible to report information and seek an SEC whistleblower award. .
Get Help From an SEC Whistleblower Attorney in South Florida Today
At Carlson & Associates, P.A., our Florida SEC whistleblower attorney is committed to protecting the rights of clients and helping them obtain the maximum available whistleblower compensation. Have any specific questions about whistleblower protection laws for the securities industry? We are here to help. Contact us at our Miami office today for a confidential informational session.
Source:
sec.gov/newsroom/press-releases/2024-118
