Ponzi Scheme Whistleblower Attorney

A Ponzi scheme is a fraudulent investment program in which current investors are paid with funds from new investors, in order to maintain the illusion that the investment pays unrealistically high returns. Eventually, the scheme falls apart because it becomes impossible to find enough new investors to pay the growing pool of older investors. These scams leave countless people cheated out of sometimes enormous sums of money, as the infamous case of Bernie Madoff showed in recent years.

Fortunately, there are ways to stop Ponzi schemes and limit the serious financial harm they can do to unsuspecting victims. One way is to encourage those who have inside information about these activities to step forward and blow the whistle on them. The government does this by allowing SEC whistleblowers to report the scheme and claim a potentially substantial reward in exchange for the evidence they have. Having an experienced whistleblower law firm will help you make the best case for the maximum reward while also protecting your legal rights. Let Oberheiden P.C.’s dedicated whistleblower lawyers help.

Warning Signs of Ponzi Schemes

Scammers are always looking for new ways to cheat others, especially investors. Lured by the promises of high returns, some of these well-meaning but financially inexperienced individuals make easy targets. You may work for a financial investment firm or another business or individual who is actively engaged in a Ponzi scheme. If so, the information you have about the scheme could not only put an end to it but qualify you for a whistleblower reward.

If you aren’t sure whether the activities you are observing count as Ponzi schemes, consider some of these common red flags on federal securities laws:

Unrealistically high returns: Promises of investment returns that simply do not make sense are a possible indicator of a Ponzi scheme. You should especially be watchful of strong promises or guarantees of such returns, or someone who is pressuring you to invest.
Few or no apparent risks: On the other side of unrealistic return promises are assurances that the investment carries little or no risk of loss. The reality is that all investments, even conservative ones, carry a degree of risk.
Consistently positive returns: The stock market goes up and down, with the value of investments fluctuating over time. An investment that always (at least initially) pays out strong dividends and generates positive returns should be examined more closely.
Unlicensed financial professionals: Check the credentials of the individual or firm who is selling or marketing the investment item in question. These parties are required by federal and state law to be licensed or registered.
Unregistered investment products: Likewise, investments that are not registered with the Securities and Exchange Commission (SEC) are probably fraudulent and may be used in a Ponzi scheme. Without registration, an investor simply should not trust the product being sold.
Lack of transparency: Financial professionals and firms should be transparent about the investment products they sell. Complex, secretive, or unusual strategies should raise red flags.
Lack of communication: Similarly, an investor should be suspicious if the firm that sold them the product refuses to answer questions or communicate. It should never be unreasonably difficult to reach a broker or other financial professional with whom an investor works.
Problems with payments: The ultimate collapse of the Ponzi scheme occurs when investors stop receiving their promised returns. If you or someone you know is experiencing payment issues, it may be time to blow the whistle.

What To Know About the SEC Whistleblower Program

The Securities and Exchange Commission combats investment fraud, including Ponzi schemes, in an effort to keep markets safe for investors and enable trust in the economy. But with limited staff and resources, the agency can only do so much on its own. For that reason it relies on individuals who have inside information about fraudulent and illegal activities affecting stocks and securities.

If you have evidence concerning a financial professional or firm that is operating a Ponzi scheme, you may be able to submit that information to the SEC and qualify for a reward. However, there are a few requirements:

The information must be original: This means it is not already known to the public or to the government.
The information must be voluntarily provided: If the government obtains the information from you after demanding it, it may not meet this criterion.
The information must lead to a successful SEC enforcement action: The SEC must be able to use the information to recover at least $1 million in penalties from the offending party.
You must be the first to report it: The law rewards those who blow the whistle first, which is why you should speak with an SEC whistleblower lawyer immediately if you have evidence of a Ponzi scheme.

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)

What If I Face Retaliation?

Many whistleblowers learn about Ponzi schemes because of the firms for which they work. But they fear they will face retaliation from their employer if they report the fraud. The law is clear: it is illegal to retaliate against someone for blowing the whistle on investment scams. Workplace retaliation takes many forms, including:

Job termination
Demotion
Denial of a promised promotion
Denial of workplace benefits
Withholding pay or a bonus
Decreased work hours
Creating a hostile work environment
Harassment and discrimination

How Can An SEC Whistleblower Attorney Help You?

It is imperative that, if you have evidence of someone engaged in a Ponzi scheme or securities laws violations, you talk with an attorney about reporting and filing a whistleblower claim. Oberheiden P.C. is ready to assist you with the following:

Examining the evidence and information you have to determine if it qualifies for a whistleblower reward
Gathering additional evidence that may support the information you already have that a Ponzi scheme is operating
Filing the proper paperwork and reporting the Ponzi scheme to the appropriate individuals at the SEC and/or other government agency
Handling all communications with the government and ensuring you remain responsive to their requests
Helping you address any workplace retaliation that you may face with corporate whistleblower protection
Arguing for the maximum whistleblower reward amount by demonstrating the usefulness of your information to the government

Our team is tenacious in handling all types of whistleblower cases, including those involving Ponzi schemes and other forms of securities fraud. We leverage our extensive experience working with the SEC, the Department of Justice, and other federal agencies on behalf of whistleblowers. Our goal is to not only put an end to these types of fraud but also work to ensure that whistleblowers who step forward are rewarded for their courage. Reach out to us today to get started.

FAQ: Filing a Ponzi Scheme Complaint

How Much of a Reward Can I Claim?

If the information that you provide to the SEC allows the government to recover at least $1 million in sanctions from the party that is running the Ponzi scheme, you can claim a portion of the sanctions. The amount will vary between 10% and 30%, depending on various factors like those listed below.

Which Factors Affect the Whistleblower Reward Amount?

In deciding how much of a reward to offer you, the government will take different factors into account. These include how useful the information was in helping the government’s enforcement action, how cooperative the whistleblower was in working with the government, and the government’s interest in deterring such Ponzi schemes in the future. Particularly significant fraudulent investments with numerous victims tend to qualify for higher SEC whistleblower awards.

Can I Negotiate the Amount of My Whistleblower Reward?

Yes, you can negotiate with the government in settling a final reward. This is where having an experienced attorney is critical to making the strongest case for the highest amount of compensation. Our firm works with whistleblowers to demonstrate the value of their information to the government. We also take steps to ensure that you remain responsive and cooperative to the government’s requests for more information.

How Long Do Whistleblower Cases Take?

You should be aware that some whistleblower cases, especially where the Ponzi scheme is complex and there are many potential victims, can take years to resolve. The government not only has to investigate and untangle the scam itself, it needs to gather evidence and talk to witnesses to build its case. The government wants to stop these scams and that means ensuring it has the necessary evidence to obtain a conviction or levy sanctions.

Does My Information Have to Support a New Investigation?

Some whistleblowers wonder whether the evidence in their possession is only useful if it supports the opening of a new SEC investigation. But your information can help the government with an existing Ponzi scheme investigation and still qualify for a reward. The key is whether the information you have meets the criteria listed above.

Will Oberheiden P.C. Protect My Anonymity?

You are allowed to submit a Ponzi scheme whistleblower claim anonymously, and we will protect your anonymity. You need to have an attorney who works with the government on your behalf, but we will keep your identifying details confidential. This includes anything that may allow someone to directly or indirectly identify you. If someone happens to learn of your identity in any way, and this leads to employment mistreatment, we can help SEC whistleblower clients assert their legal rights against retaliation.