Crime May Not Pay But Whistleblowing Certainly Does

Posted on April 4, 2014 by Adrienne Gonzalez

The Securities and Exchange Commission today announced that the whistleblower who received the first award under the agency’s new whistleblower program will receive an additional $150,000 payout after the SEC collected additional funds in the case.

The whistleblower, who the SEC did not identify in order to protect confidentiality, has now been awarded a total of nearly $200,000 since the award was announced on Aug. 21, 2012. The award recipient helped the SEC stop a multi-million dollar fraud by providing documents and other significant information that allowed its investigation to move at an accelerated pace and prevent the fraud from ensnaring additional victims. [SEC]

The SEC Is Aware That Some Chinese Companies Have Shoddy Accounting

Caleb Newquist
April 4, 2011

Or in some cases, just plain fraudulent.

In prepared remarks at an investors conference, Luis Aguilar said he is increasingly concerned about the proliferation of small private companies that elect to merge with public shell companies in lieu of more rigorous methods of becoming public, such as a traditional IPO. “While the vast majority of these companies may be legitimate businesses, a growing number of them have accounting deficiencies or are outright vessels of fraud” Aguilar said, speaking at a Council of Institutional Investors conference here.

And in case you missed it the auditing isn’t so hot either:

”There appear to be systematic concerns with quality of auditing and financial reporting,” he said. “Even though these companies are registered in the U.S., we have limitations when it comes to enforcing U.S. securities laws with them.”

US Securities Regulator Aguilar Sounds Backdoor-Merger Alarm [Dow Jones]
SEC official concerned with ‘back-door’ listings [MarketWatch]