Proposed Act to Impose the “toughest penalties in history for
financial fraud…”

In a speech yesterday, U.S. Representative Jeb Hensarling
(R-Texas), Chairman of the
House Financial Services Committee, explained some details of
his proposed Financial CHOICE Act.

As one might expect in an election year, Chairman Hensarling’s
announcement has been met with both immediate support and
criticism.  One aspect of his proposal is worth mentioning for
potential SEC whistleblowers and SEC whistleblower law firms.

On page 9 of his prepared remarks for the speech, Chairman
Hensarling states:

…the Financial CHOICE Act will impose the toughest penalties
in history for financial fraud, self-dealing and deception.

We will double the cap for the most serious securities law
violations and will allow for triple monetary fines when
penalties are tied to illegal profits.  We will give the SEC
new authority to impose sanctions more closely linked to
investor losses – and increase punishments even more for
repeat offenders.  We will increase the maximum criminal fines
for both individuals and firms that engage in insider trading.

Excerpt from Chairman Hensarling’s speech

Section Five of the Executive Summary of the proposed Act
states that the legislation will “demand accountability from
Wall Street through enhanced penalties for fraud and
deception”.  According to the Executive Summary, among other
things the legislation aims to:

• Impose enhanced penalties for financial fraud and
  self-dealing and promote greater transparency and
  accountability in the civil enforcement process.
• Allow the SEC to triple the monetary fines sought in both
  administrative and civil actions in certain cases where the
  penalties are tied to the defendant’s illegal profits.  Give
  the SEC new authority to impose sanctions equal to investor
  losses in cases involving “fraud, deceit, manipulation, or
  deliberate or reckless disregard of a regulatory
  requirement” where the loss or risk of loss is significant,
  and increase the stakes for repeat offenders.

Excerpt from the Executive Summary

Potential SEC whistleblowers and SEC whistleblower law firms
might want to consider the proposed Financial CHOICE Act in
conjunction with the
report
released by U.S. Senator Elizabeth Warren (D-Mass) earlier this year titled “Rigged Justice: 2016,
How Weak Enforcement Lets Corporate Offenders Off Easy”.

At this time there is no way to know what will ultimately
become of the Financial CHOICE Act or the Rigged Justice
report, or what impact they may have on SEC whistleblowers. 
But they are enlightening in that, taken together, they
demonstrate bipartisan support in favor of increased SEC
penalties and increased accountability for corporate
wrongdoers.  They also demonstrate that these issues have been
taken up by prominent leaders in not one but both houses of
Congress.

Increased accountability is a significant issue for potential
SEC whistleblowers who want the SEC to be able to stop the
wrongdoing and to save people from being victimized by the
frauds that they have uncovered.

Increased SEC penalties can be significant, because under the
SEC Whistleblower Award Program, if one or more whistleblowers
provide information to the SEC that it uses to bring a
successful action in which it collects more than $1 million
from the wrongdoers, the SEC is required to give the
whistleblower(s) a monetary award of between 10% – 30% of the
amount of money it collects, assuming all other requirements
are met.

* * *

About the Pickholz Law Offices LLC

The Pickholz Law Offices LLC is a law firm that focuses on
representing clients involved with investigations conducted by
the U.S. Securities and Exchange Commission, FINRA, and other
securities regulators.

The Pickholz Law Offices has represented employees, officers,
and others in SEC whistleblower cases involving financial
institutions and public companies listed in the Fortune Top
10, Top 20, Top 50, Top 100, Top 500, and the Forbes Global
2000. We were the first law firm ever to win an SEC
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Commission in Washington. Inside Counsel magazine named this
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whistleblower program. Examples of the
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In addition to representing SEC whistleblowers, since 1995 the
Firm’s founder, Jason R. Pickholz, has also represented many
clients in securities enforcement investigations conducted by
the SEC, FINRA, the U.S. Department of Justice and US
Attorney’s Offices, State authorities, and more. Examples of
some of the many
securities enforcement cases that Mr. Pickholz has been
involved with are available here.

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How to Contact the Pickholz Law Offices LLC

If you would like to speak with a securities lawyer or SEC
whistleblower attorney, please feel free to call Jason R.
Pickholz at 347-746-1222.

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