Securities Act of 1933 Whistleblower Attorney

The Securities Act of 1933, also referred to as simply the Securities Act, is the landmark federal statute that governs securities and financial markets. Enforced by the Securities and Exchange Commission, or SEC, this law exists to ensure that investors have relevant, reliable, and material information about securities before deciding to invest. The law is also aimed at preventing securities fraud and misrepresentation in the securities market.

The SEC does what it can to enforce the nation’s federal securities laws, investigate allegations of fraud, bring to justice those individuals and firms that harm investors, and secure monetary sanctions from those who are found guilty or liable for illegal activities. But the SEC and Commodity Futures Trading Commission (CFTC) are unable to fulfill their mission without the assistance of whistleblowers. Not only can these individuals put an end to fraudulent practices and protect investors in the process, they can potentially claim a portion of the money that the SEC recovers as a reward.

However, properly filing a whistleblower complaint and seeking the maximum reward requires the assistance of knowledgeable legal counsel. Count on the dedicated and experienced whistleblower law firm of Oberheiden P.C.

What Does the Securities Act Do?

The 1933 Securities Act was the first federal law to regulate the securities market following the 1929 stock market crash. It has the twin goals of increasing transparency for investors and preventing fraudulent disclosure and misrepresentation in securities products. Overall, the objective is to protect investors from dishonest tactics designed to take advantage of the public and distort markets. It is enforced by the SEC, which was created the following year by the Securities Exchange Act of 1934.

Companies are required under the Securities Act to register their securities offerings with the SEC. Doing so provides critical information that investors must know to make educated investment decisions. That information includes:

• A description of the securities product
• A description of the offering company’s assets and business
• Details about the company’s executive management
• Financial statements that have been audited by independent certified public accountants

Not only is this information reported to the SEC, but it is then made public so that investors can know more about the securities products they are purchasing and the investment companies that are selling them. It should be noted, however, that certain investment products are exempt from these requirements. They include:

• Intrastate offerings (made by small companies that want to raise money locally, within a state)
• Offerings that are of a limited size
• Municipal, state, and federal government securities offerings
• Certain private offerings that are made to a select group of institutions and individuals

How Do Firms Violate the Securities Act?

While the Securities Act is intended to keep securities offerings transparent and the public and private companies that sell them honest, there are plenty of ways that investment firms and the individuals employed by them break the law. These are just a few examples:

Failing to register a security: The law is abundantly clear that securities which are not exempt from the Securities Act must comply with the strict registration requirements of the SEC. Many companies decide to forego this because of the expense and hassle that attach to this process.

Inaccurate reporting data: Even if a company does register its securities products with the SEC, this in and of itself is no guarantee that the information it reports is accurate. Misrepresentations are designed to mislead investors and can result in substantial penalties.

Value manipulation: When securities firms manipulate the value of their investment products, there is clearly an attempt to mislead investors using improper securities trading practices. There are numerous ways that firms do this, including:

• Conveying false or misleading disclosures about a company to the general public or to specific investors
• Rigging prices, quotes, or trades to give the false impression that there is either more or less demand for a security product
• Conducting a number of transactions to make it appear as though a security is more actively traded than it really is

Using improper accounting techniques: Securities companies in the United States use what are known as generally accepted accounting principles (GAAP) to report their financial data. Many companies negligently or intentionally disregard these standards or use less credible ones to mislead investors about the value of their securities and their financial performance.

Put our highly experienced team on your side

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

How to Become a Securities Act Whistleblower

If you work for an investment firm or a company that offers securities, you may have unique access to evidence and information that demonstrates a violation of securities laws. By reporting what you know, you can protect investors from harmful practices and the broader economy from market distortions. You can also potentially qualify for a whistleblower reward.

However, becoming a whistleblower is more complicated than simply telling the SEC what you know. There are rules to follow, steps to take, and various factors that the SEC will consider as it determines whether and how much to offer you as a reward. Retaining a whistleblower law firm will help you meet such requirements as:

The whistleblower must have original information: The whistleblower must report information that was not previously known to the SEC. Additionally, the whistleblower’s evidence must not be available to the general public or already reported in the media.

The information must facilitate an SEC enforcement action: The SEC values detailed information that it can use to launch an enforcement action against the parties who are breaking the law. You must be able to demonstrate that your evidence can do this.

The whistleblower must voluntarily provide their information: The SEC must learn of the evidence you have because you voluntarily turned it over to the agency. If the SEC learns what you know because of a subpoena or formal investigation, you probably cannot claim a reward.

The SEC must recover sanctions of over $1 million: The SEC’s enforcement action must result in monetary sanctions that exceed $1 million. The whistleblower can claim as a reward a portion of these sanctions that are recovered.

There are other requirements to become a Securities Act whistleblower, and Oberheiden P.C. is ready to explain and help you meet these criteria. To get started with your case, contact our legal team. We can give you a confidential case analysis and begin working with you to seek a whistleblower reward.

FAQ: Filing a Securities Act Whistleblower Complaint