Whistleblower Receives Award of Approximately $1.5 Million

The Securities and Exchange Commission today announced that a whistleblower has earned an award of more than $1.5 million.  The whistleblower provided the SEC with vital information and ongoing assistance that proved important to the overall success of an enforcement action.  However, the SEC’s order notes that the award was reduced because the whistleblower did not promptly report the misconduct and benefited financially during the delay.

“This award reflects the value of the information while underscoring the need for individuals to come forward without delay so that our enforcement staff may quickly leverage the information and prevent further investor harm,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “This is especially critical and, as is the case here, may result in an award reduction where an individual provided valuable information but it came after receiving a benefit from the wrongdoing.”

The SEC’s whistleblower program has now awarded approximately $322 million to 58 individuals since issuing its first award in 2012.  In that time, more than $1.6 billion in monetary sanctions have been ordered against wrongdoers based on actionable information received by whistleblowers.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.  Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. read more »

Too much high-frequency trading can rig the market, IEX founder says

Marketplace Tech is spending all week looking at the risks technology can introduce to investing. Today, part one of a look at high-frequency trading. Critics of too much high-frequency trading say it makes markets vulnerable to manipulation, and the algorithms that fuel it can cause abrupt dips and rises in stock prices. Brad Katsuyama is a former big bank trader who's the subject of the 2014 Michael Lewis book "Flash Boys." He started studying high-frequency trading before the 2008 financial crash and eventually decided to start his own stock exchange to remove the influence of trading technologies that he says rig the market. Molly Wood talks with Katsuyama and Jonathan Macey, professor of corporate law at Yale, about the implications of high-frequency trading. read more »

Why a Money-Laundering Case Hits Denmark Close to Home

Denmark’s status as one of the world’s least corrupt nations is being challenged by allegations that its biggest bank, Danske Bank A/S, was a central pipeline for channeling billions in illegal funds across Europe from Russia, Moldova and Azerbaijan. An internal bank report is expected on Sept. 19 to detail just want happened. The biggest money-laundering scandal in modern Danish history won’t end there.

In a literal sense, it didn’t. The suspicious funds were funneled through Danske’s branch in Tallinn, Estonia, from 2007 to 2015, the bank has conceded. (Danske acquired the branch in 2007, the same year Estonian authorities identified problems with non-resident accounts.) The head of Denmark’s financial regulator said it appears Danske had a culture of “mean and lean” that departed from the typical Scandinavian approach in which people “challenge and bring bad decisions up the chain" for the sake of “frank discussions and reaching a consensus." read more »

U.S. company manager pleads guilty in PDVSA bribery scheme

A former manager of a U.S.-based logistics company pleaded guilty on Thursday to paying bribes to secure contracts from Venezuela’s state oil company PDVSA, and the guilty plea of the official who was bribed was also unsealed, the U.S. Justice Department said.

Juan Carlos Castillo Rincon, 55, pleaded guilty in federal court in Houston to conspiring to violate the Foreign Corrupt Practices Act, the Justice Department said in a statement.

Judge Nancy K. Johnson also unsealed the guilty plea of Petróleos de Venezuela, S.A. (PDVSA) official Jose Orlando Camacho, 46, whom Castillo had bribed, it said.

Camacho had pleaded under seal to conspiracy to commit money laundering in July 2017, the statement said. It referred to Camacho as a “foreign official” but did not specify the position he held in the company, Petroleos de Venezuela SA [PDVSA.UL].

Fourteen people have now pleaded guilty as part of an investigation by the Justice Department into bribery at PDVSA that became public with the arrest of two Venezuelan businessmen in December 2015. read more »