The integrity of the securities and financial markets is critical to the growth of U.S. business and the welfare of the U.S. economy.  Whistleblowers play an important role in reporting fraud to the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) to assist in their important mission of protecting investors and regulating the U.S. financial and commodities markets.

The SEC enforces the federal securities laws, primarily contained in the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act and the Dodd-Frank Act.  The SEC has broad jurisdiction over the U.S. financial markets and regularly brings enforcement actions against public and private companies, banks, investment advisers, asset managers, and individuals. 

Common examples of securities fraud include:

  • False or misleading disclosures regarding a company’s financial results or condition, its products, or its business risks
  • Improper securities trading practices
  • Charging hidden fees to investors
  • Ponzi schemes
  • Bribery of foreign officials
  • Failing to register securities, including digital tokens and other crypto assets

Similarly, the CFTC enforces the Commodity Exchange Act, the primary federal law regulating transactions in commodities, such as oil, gas, agricultural products, and metals.  The CFTC also has jurisdiction over financial derivatives such as commodity futures and certain types of option or swap agreements.  The CFTC frequently brings enforcement actions against commodity market participants for fraudulent disclosure, market manipulation, and trading violations.