Whistleblowers are Essential to Monitoring COVID-19 Compliance

The Securities Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), and Internal Revenue Service (“IRS”) have issued statements making it clear that they will continue to investigate fraud related to COVID-19 compliance. The agencies’ enforcement efforts will also continue despite the changing public health conditions.

The SEC warned of risks related to insider trading and reporting violations stating that the agency wished “to emphasize the importance of maintaining market integrity and following corporate controls and procedures. For example, in these dynamic circumstances, corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances.” Persons with financial information that may impact the value of financial products may not use this information to gain an advantage over the average shareholder. Insider trading is a violation of securities law, and whistleblowers are well poised to report this wrongdoing.

The CFTC has warned that financial criminals may exploit the COVID-19 crisis seeking to prey on fears and instability. The agency encouraged individual investors to be vigilant in light of the COVID-19 crisis by researching persons selling financial products before making any purchases, and reporting any potential frauds. The CFTC’s whistleblower program requires filing complaints using a TCR form and requires the assistance of a licensed attorney to file anonymous complaints.

Similarly, the IRS warned of COVID-19 phishing scams related to relief checks issues as part of COVID-19 relief CARES Act. The agency encourages anyone targeted by scams seeking personal information or impersonating the IRS to report these frauds.

Jay Clayton, Chairman of the SEC, emphasized the importance of maintaining market stability in this time of crisis. Whistleblowers have traditionally played an essential role in maintaining markets by the nature of their unique positioning to report otherwise difficult to uncover misconduct. Whistleblowers like Dr. Li Wenliang and Capt. Brett Crozier. A whistleblower task force for COVID-19 whistleblower matters is essential to protecting market stability and public health. There are several avenues by which whistleblowers may report COVID-19 related fraud. These avenues include the qui tam provisions of the False Claims Act to directly reporting to the SEC, CFTC, or IRS as described by the agencies and above. Whistleblowers have been and will continue to be the key to uncovering frauds at the highest level. The value of whistleblower insights is at a premium in light of the public crisis created by the international pandemic COVID-19 and the issuance of anti-fraud statements by multiple financial regulatory bodies.

Read the SEC Statements Here:

The Deep and Essential Connections Among Markets, Businesses, and Workers and the Importance of Maintaining those Connections in our Fight Against COVID-19

Statement from Stephanie Avakian and Steven Peikin, Co-Directors of the SEC’s Division of Enforcement, Regarding Market Integrity

Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19

Read the CFTC Statements Here:

Customer Advisory: Be on Alert for Frauds Seeking to Profit from Market Volatility Related to COVID-19

Read the IRS Statements Here:

IRS issues warning about Coronavirus-related scams; watch out for schemes tied to economic impact payments

Learn more about Reporting COVID-19 Related Violations Here:

Whistleblowing and The Coronavirus Crisis

Coronavirus Whistleblowers and Qui Tam: Reporting Fraud and Misconduct on Public Health and Safety Violations

Whistleblower Attorney Urges DOJ to Protect Confidentiality Rights of Coronavirus Fraud Whistleblowers

Share This Story, Choose Your Platform!

Latest News & Insights

  • September 27, 2023

    On September 27, the U.S. Commodity Futures Trading Commission (CFTC) issued a whistleblower award for $300,000. The awarded whistleblower provided the CFTC with original information which caused the agency to open an investigation that resulted in a successful enforcement action.  According to the CFTC, the whistleblower provided a “particularly informative ...

  • September 19, 2023

    On September 19, the U.S. Commodity Futures Trading Commission (CFTC) announced two separate whistleblower awards totaling $15 million. The awards were issued to two whistleblowers who voluntarily provided the agency with original information that led to separate enforcement actions. Through the CFTC Whistleblower Program, qualified whistleblowers are entitled to awards ...

  • September 8, 2023

    On September 8, the U.S. Securities and Exchange Commission (SEC) announced settled charges filed against Monolith Resources LLC, a privately held energy and technology company headquartered in Lincoln, Nebraska. The SEC charged Monolith with using overly restrictive seperation agreements which violated Rule 21F-17 of the SEC Whistleblower Program. Rule ...

  • September 7, 2023

    Former Commissioner of the Securities and Exchange Commission (SEC), Allison Herren Lee, who currently serves Of Counsel at Kohn, Kohn & Colapinto, spoke on August 31 at a “Lunch ‘n Learn” session hosted by The Anti-Fraud Coalition (TAF). Throughout her tenure as Commissioner and her service as Acting Chair, ...

Subscribe for News & Resources

Receive exclusive updates and news from our firm.