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New York, NY (March 19, 2018) – The Securities and Exchange Commission today announced that it will award a group of whistleblowers more than $83 million, the largest awards announced since the SEC Whistleblower Program was established seven years ago. Represented by Labaton Sucharow, the whistleblowers’ tips led to a landmark enforcement action that resulted in Merrill Lynch paying $415 million to settle charges that it misused customer cash to generate profits for the firm and failed to safeguard customer assets.
The whistleblowers tipped the SEC to long-running misconduct at Merrill Lynch, which over numerous years, executed complex options trades that lacked economic substance and artificially reduced the required deposit of customer cash in the reserve account. Through the reckless conduct, Merrill Lynch violated the SEC’s Customer Protection Rules and put billions of dollars of customer funds at risk in order to finance its own trading activities.
“This historic award is a wake-up call for Wall Street,” remarked Jordan A. Thomas, Chair of the Whistleblower Representation Practice at Labaton Sucharow. “With its protections, incentives and the ability to report anonymously, the SEC’s program empowers every citizen to be its eyes and ears. Mark my word, this is only the beginning of a revolution in ethical action for Corporate America. Bad actors are on notice.”
“Our clients represent the very best of Wall Street and feel vindicated by the SEC’s determination,” continued Thomas. “By coming forward, these courageous executives protected millions of Merrill Lynch’s customers, but their impact is far greater than that. They are a shining example of integrity in action and will inspire others on Wall Street to break their silence and, as a bonus, a substantial part of this life-changing award will be donated to local charities.”
A principal architect of the SEC Whistleblower Program, Thomas established Labaton Sucharow’s Whistleblower Practice in 2011. Both pioneer and recognized leader in the field, the Labaton Sucharow team today combines more than 100 years of enforcement experience, more than any other SEC whistleblower practice in the world. Their cases have led to groundbreaking recoveries and many of the SEC’s largest and highest-profile cases.