Front Running Whistleblower Attorney

Front running is a form of insider trading and market manipulation that amounts to securities fraud or federal securities law violation. It allows dishonest traders and investment firms to unfairly profit at the expense of other investors, defrauds honest individuals of their hard-earned money, erodes trust in the securities markets, and undermines the American economy. This behavior can result in substantial civil and criminal penalties, with the Securities and Exchange Commission (SEC) primarily responsible for investigating and stopping it.

The SEC works hard to protect markets and investors from this type of fraudulent activity, but the agency is limited in its capabilities. For this reason, it is imperative that individuals with inside information about front running step forward to blow the whistle. By helping the government, you can potentially qualify for a whistleblower reward based on the money recovered from the wrongful parties. This is where having a skilled whistleblower law firm will help. Find out why Oberheiden P.C. is a trusted leader in whistleblower claims involving front running and other forms of securities fraud.

Understanding Front Running

If you work for an investment or financial firm, you may have unique access to the inner workings of the company. While many of these businesses are honest, numerous bad actors within the industry engage in various forms of securities or tax fraud every year. One form of fraud is front running. You may not be familiar with this activity, but it is possible that you have observed it and have evidence of it in your possession.

Front running is sometimes called tailgating. It happens when a trader purchases stock based on confidential, non-public information about a pending transaction. This imminent transaction could substantially affect the value of the stock in question. The price may increase or decrease as a result, but either way, the trader has profited off of insider information and, in turn, has further (and improperly) affected the value of the stock for other investors. In this way, front running is like a combination of insider trading and market manipulation.

The difficulty of proving front running is that it concerns the intent of the trader. Often, there is significant insider information that does in fact affect the value of a security once it becomes public. If an individual trades based on that information prior to it becoming public, then they have effectively engaged in illegal insider trading. But if the trader only acted once the information was made public, or acted on the basis of something else that was not considered insider information, then the transaction would likely be legal.

Whistleblowers are often best positioned to identify evidence of front running. There are sometimes distinct clues that a trader or firm is engaged in this activity. If you have observed any of the following, you may have information concerning front running:

Action that is taken immediately before a significant, undisclosed securities transaction is executed
A rush on the part of an individual trader to place trades before those of investors who have trusted the trader or the firm
An attempt to hide or cover up the transaction, including by using another investor’s account
Secretly executing mass numbers of trades all at once, indicating an unusual increase in activity
Failure by the trader to disclose their transaction to the firm or to have it cleared
An attempt by the trader to mislead the SEC or other regulatory or investigatory agencies

Qualifying For a Front Running Whistleblower Reward

Front running harms investors and the broader securities market by allowing certain individuals to improperly benefit from insider information. Reporting this activity to the SEC can help stop it, but it may also allow you to claim a whistleblower reward. The SEC, among other agencies, operates a whistleblower reward program that is intended to incentivize individuals to step forward and report what they know about front running schemes.

There are various rules that you must follow to be eligible for a whistleblower reward, and our firm is prepared to work with you to make the strongest claim. Generally, you have to meet the following criteria, among others:

The information must lead to a successful enforcement action: The SEC must be able to use the information you provide to enforce securities laws and regulations against the offending party. The more detailed and specific your evidence, the better.
The information must be original: If the evidence you have is already public or known to the SEC, Commodity Futures Trading Commission, or other government agencies, it probably will not qualify you for a reward. We can help determine whether the evidence you have meets this critical requirement.
The enforcement action must result in the recovery of at least $1 million: If the government recovers $1 million or more in monetary sanctions, you might be able to claim a portion of it. Many front running cases involve substantial dollar amounts that exceed this threshold.
The information must be given voluntarily: This means that the government usually is not the first party to act – you are. If the only reason you provided the information is that the government requested or demanded it, then you probably will not qualify for a whistleblower reward.

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)

Can a Whistleblower Attorney Help Me?

While having a whistleblower or False Claims Act attorney is not required to report front running activity or claim a reward, a lawyer can greatly assist with the process. The team at Oberheiden P.C. is experienced handling a wide array of whistleblower cases that involve securities fraud, and we can help you by:

Reviewing the information you have to determine whether it may prove front running
Filing all appropriate paperwork with the SEC and meeting the requirements of SEC whistleblower program
Keeping your identity anonymous by working with the government on your behalf
Acquiring additional evidence which may support what you already have
Ensuring your continued cooperation with the SEC, which will enhance the value of your reward
Demonstrating the usefulness of your information to the SEC’s enforcement action
Negotiating with the SEC to help secure the highest reward amount that you deserve
Helping you take advantage of laws that prohibit employer retaliation based on your status as a whistleblower

We encourage you to contact our law firm, even if you are unsure whether the evidence you have conclusively proves front running. Our SEC whistleblower lawyer can evaluate the information you have, advise as to the next steps you should take, and handle all aspects of your SEC whistleblower claim. The federal law rewards those individuals who take action and report what they know first, so time is of the essence. Give us a call today.

FAQ: Filing a Front Running Whistleblower Complaint

How Much Will Be My Reward Amount?

The amount of a whistleblower reward, if the information you have qualifies for one, will be between 10% and 30% of the sanctions recovered by the federal government. However, just because the government offers you a certain amount initially does not mean you must accept it. This is where having an experienced whistleblower attorney who is prepared to negotiate on your behalf is so important.

How Can I Improve My Chances of a Higher Reward?

First, do not delay reporting what you know. If someone else reports before you do, the information you have no longer qualifies as original because it will then be known to the government. Second, make sure the information you have is detailed and well-documented; speculation, guesses, and hearsay will not suffice. Third, make sure you cooperate with the government, since cooperative informers are more likely to win higher rewards. Lastly, if the evidence you have involves a far-reaching scheme with many wrongful parties, your reward may be higher.

Does the Information In My Possession Have to Support a New Investigation?

Much of the evidence that whistleblowers have concerns new instances of front running, allowing the government to open a novel investigation. However, this is not a requirement. The evidence you have may significantly support an ongoing investigation. It could even change the course of an existing investigation, which will aid significantly in your later claim for a whistleblower reward.

What Qualifies As Employment Retaliation?

Employment retaliation because of one’s status as a whistleblower takes many forms. Some are more subtle than others, which is one reason to contact our legal team if you have faced this treatment. Some common examples of retaliation are firing or demoting the employee; denying a promised raise, bonus, or promotion; withholding pay; reducing hours; and denying access to employment benefits or resources.

Am I Required to Have an Attorney to Remain Anonymous?

You are required to have an attorney if you wish to remain anonymous because you need someone who will communicate to the government on your behalf. We can serve you in this role by protecting your anonymity. This means taking the steps that will help prevent anyone from directly or indirectly identifying you.

How Long Does a Whistleblower Claim Take?

Whistleblower claims involve what are often substantial sums of money, both for the government in recovering sanctions and for the whistleblower who seeks a portion of that money. Additionally, in order for the government to even initiate an enforcement action, it will want to make sure that it has compelling evidence concerning as many wrongful parties as possible. For these reasons, it is not unusual for front running claims to take a few years to resolve. If possible we will try to speed up the process.

Link back to: Whistleblower Lawyers (parent page)