The SEC regulates many private equity investments in the United States. More specifically, they target investment advisers, private equity firms, and businesses who violate securities laws. Further, the SEC offers large financial rewards to whistleblowers who anonymously expose significant fraud in the private equity markets. As such, an anonymous private equity whistleblower can work through a lawyer to report illegal schemes and collect rewards.
Private Equity Whistleblowers Earn Large Financial Rewards for Anonymously Exposing Fraud and Illegal Conduct
Through whistleblower reward laws, the SEC rewards private equity whistleblowers who expose violations of securities laws. Further, these whistleblowers can anonymously report illegal conduct through a lawyer and collect a reward. This anonymous whistleblower protection helps encourage financial professionals to report hard to detect fraud.
Anonymous Whistleblowers Identify Large Hard To Detect Investment Fraud Schemes
Traditionally, the SEC provides little oversight and regulation in the private equity markets. However, in the wake of the 2008 financial crisis, new whistleblower reward laws expanded the SEC’s ability to regulate the private equity markets. Further, these laws encourage anonymous reporting by private equity whistleblowers. More specifically, built in protection encourage financial professionals, corporate insiders, and high end investors to report significant fraud. In fact, because the SEC calculates these rewards based on a percentage of money recovered, whistleblowers earn more money for reporting larger fraud schemes.
Anonymous Whistleblowers Expose Fraud and Illegal Conduct By Private Equity Firms
Private equity firms commonly buy and sell portfolio companies. Further, these transactions require thorough investigations and accurate information including revenues, liabilities, and net values. As such, the SEC targets private equity firms who defraud investors, companies, or other private equity firms. More specifically, the SEC targets private equity firms that take control positions in portfolio companies and conceal fraud by these companies.
The SEC Also Rewards Private Equity Whistleblowers Who Anonymously Expose Fraudulent Investment Advisers
The SEC also encourages anonymous private equity whistleblowers to expose fraudulent investment advisers. More specifically, the SEC pays large rewards to whistleblowers who report investment advisers who violate securities laws. Further, where investment advisers systematically take advantage of investors, the SEC wants to know so they can protect investors.
Anonymous Whistleblower Rewards Also Target Fraudulent Companies and Corporate Insiders
Whistleblower reward laws also target fraudulent businesses and corporate insiders. More specifically, businesses who defraud management investment companies and other private equity investors can be fined. Further, the SEC fines businesses who fraudulently inflate revenues and values or conceal liability to equity investors. The SEC also rewards anonymous whistleblowers who expose these fraudulent businesses and insiders. Further, the SEC wants to identify and regulate sham companies that are vehicles to fraudulently divert and misappropriate funds.
The SEC takes the position that when private companies solicit or accept investments, including from investment companies, they must comply with the federal securities laws. Further, these private companies should not violate the antifraud provisions of the federal securities laws. If they do, the SEC seeks disgorgement of ill-gotten gains, civil penalties, and permanent injunctive relief. Further, the agency pays private equity whistleblowers who expose these companies.