Client Awarded Nearly $50 Million After Providing Original Information To The Commission That Led To The Successful Enforcement Action Against the Bank of New York Mellon
Partner Michael A. Lesser, who leads Thornton Law Firm’s whistleblower representation practice, represented the whistleblower who received the historic award from the SEC. The almost $50 million dollar award was at the time the largest amount ever awarded to one individual in the history of the SEC whistleblower program.
His client provided original information to the Securities and Exchange Commission that resulted in a successful enforcement action that returned a significant amount of money to harmed investors. The SEC’s investigations into the Bank of New York Mellon’s handling of foreign exchange transactions (also known as Forex, or FX) were some of the largest, broadest investigations ever conducted by the independent federal regulatory agency.
Mr. Lesser’s client was an FX trader who worked for Bank of New York Mellon.
Based on the whistleblower’s information, the SEC found that the Bank of New York Mellon misled its custodial banking clients by telling them that the bank provided “best price” and “best execution” on custodial client FX trades. Instead, the bank traded for its own profit and against its customers, providing its custodial banking clients with FX prices at or near the worst reported interbank rates of the day or session. By ensuring that its clients almost always bought high and sold low, the bank made substantial profits, all coming from the pockets of its own clients: mutual funds, retirement funds, and pension funds – funds safeguarding the retirements of teachers, nurses, municipal workers and all other hard-working individuals trying to save for the future.
The bank paid approximately $894 million to Federal regulators and classes of investors and clients as a result of its practices being exposed, including more than $163 million to the SEC. “No settlements could have occurred, and no practices would have changed unless this whistleblower came forward and reported what he knew.” said Mr. Lesser. “My client would like to express his deep appreciation to the SEC’s enforcement and whistleblower staff for their tireless work on this groundbreaking matter. He is very happy with the award.”
The SEC Whistleblower Program offers protections and incentives that helped the firm’s client report what he knew to the SEC. This important program provides eligible whistleblowers with the ability to report securities law violations anonymously and the opportunity to earn substantial monetary awards in the event of a successful enforcement action. SEC whistleblowers may be eligible to receive 10 to 30 percent of the SEC’s recovery. To be eligible, a whistleblower must provide the SEC with original information, and only and original source of such information can be compensated under the whistleblower program. Investigations can take time; how quickly a whistleblower reports bad conduct can be a factor in the determination of that whistleblower’s award percentage. The SEC’s whistleblower program has awarded over $500 million to 83 whistleblowers since 2012
“Being a whistleblower can be enormously difficult. It can be a long and uncertain road. Without programs like the SEC’s that protect and reward meritorious whistleblowers, much harmful conduct would continue unreported,” said Mr. Lesser. “The SEC’s whistleblower program is vital to the mission of protecting investors and addressing violations of securities law. I am very grateful to the SEC and the Office of the Whistleblower for how they worked with my client on this groundbreaking case,” he said.
Information submitted to the SEC must involve violations of the United States securities laws. Whistleblower information submitted to the SEC may involve:
• Ponzi scheme, Pyramid Scheme, or a High-Yield Investment Program
• Theft or misappropriation of funds or securities
• Manipulation of a security’s price or volume
• Insider trading
• Fraudulent or unregistered securities offering
• False or misleading statements about a company (including false or misleading SEC reports or financial statements)
• Abusive naked short selling
• Bribery of, or improper payments to, foreign officials
• Fraudulent conduct associated with municipal securities transactions or public pension plans
• Other fraudulent conduct involving securities
About Thornton Law Firm:
Thornton Law Firm LLP in Massachusetts provides experienced legal representation to SEC whistleblower clients nationwide. Attorney Michael Lesser and his team represent whistleblowers in protecting and advocating for all their rights under the law. More information about the firm and its SEC Whistleblower, False Claims Act and Qui Tam practice is available at tenlaw.com. Call Mr. Lesser at (888) 491-9726 or use our secure contact form to tell us your story. We will evaluate your claim in the strictest confidence.
