For the third time this year, the federal Securities and Exchange Commission (SEC) has shown its commitment to its whistleblower program under the Dodd-Frank Act by taking action against a major corporation that interfered with a whistleblower’s ability to report pertinent information. The SEC imposed a fine of $340,000 on Health Net, Inc. for its policies that prevented outgoing employees from reporting SEC law violations. As part of the agreement, Health Net, Inc. will contact former employees to confirm that they are not prohibited from claiming whistleblower awards.
The Dodd-Frank Act was authorized by Congress in July 2010 and allowed the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission (CFTC) to provide monetary incentives to employees that reported violations to the Federal Securities Laws, or the Commodity Exchange Act. A 10 to 30 percent whistleblower award is given to an employee that supplies original, pertinent, and valuable information on fraudulent and illegal activity that results in a settlement of one million dollars or more in favor of a government agency. The intention behind the Dodd-Frank Act is to encourage employees to come forward and help the SEC provide valuable protection to investors. Health Net, Inc.’s policies prevented employees from pursuing an award for providing such information.
The SEC actions over this past year sends a message to corporations to review their current policies on whistleblower activity and revise them to be in full compliance with the mandates of the Dodd-Frank Act. Since 2011, the SEC has paid out $85 million in whistleblower awards. As they pursue other corporations who remain in violation of SEC laws, analysts predict that future awards could be in excess of $100 million.
Whistleblowers Are Protected Against Retaliation
Individuals with information on fraudulent or illegal activity by their employer can contact the SEC through an online portal, or by mailing their information to the SEC office in Washington, DC. Enforcement actions taken by the Commission are posted and whistleblowers have 90 days to submit their application for their award. The SEC determines the amount of the award by examining how important the information received was to the enforcement action, how cooperative the whistleblower and their attorney were during the process of investigation, and the risks involved in bringing the information forward.
Cherry Hill Whistleblower Lawyers at McOmber McOmber & Luber, P.C. Help Protect Those Reporting Fraud
If you or someone you know is considering reporting fraudulent or illegal activity of an employer to the SEC, the experienced Cherry Hill whistleblower lawyers at McOmber McOmber & Luber, P.C. can ensure that your legal rights are protected. The laws regarding whistleblower awards are specific, and it is vital to the protection of your identity to consult with a reputable and knowledgeable whistleblower lawyer.
Call us in our Red Bank offices at 732-842-6500, or in our Marlton offices at 856- 985-9800. You can also contact us online to schedule a consultation today to learn how we can protect your rights.