Financial fraud on a national level can corrupt the stock market, impact financial institutions, and devastate the housing market. Illegal acts made by stock brokers or the brokerage in which they work can lead to a market crash similar to the one seen in 2009. In 2009, the stock market suffered great losses due to financial fraud committed by several large institutions regarding mortgage backed securities.
As a result, the stock market dropped several thousand points and the housing market saw the worst crash since the Great Depression.
Homeowners saw their home values drop 35 percent or more, with some areas suffering losses of 60 percent or more. Many people lost their homes due to this act of fraud and even today there are still effects that can be seen in the housing market.
The False Claims Act
The False Claims Act, also known as the Whistleblowers Act, was first enacted during the Civil War by President Lincoln as a way to stop war profiteering. Defense contractors were falsely charging the government for supplies or services that they were not providing. In an effort to stop this from occurring, the government enacted this law that makes this type of action illegal and gives a reward to anyone who reports this type of wrongdoing.
Since its inception, the False Claims Act has grown to encompass any type of company that receives payments from the government for goods or services, not just defense contractors.
Also included in the False Claims Act are companies or entities that receive grant or research money from the government or use government agencies to get approval for their products.
After the market crash in 2009, Congress passed the Frank-Dodd Act that set specific regulation for the financial industry. Part of this Act also includes wording providing the same whistleblower protections to anyone reporting financial fraud. While not an actual part of the False Claims Act, Frank-Dodd gives the same protections and rewards to any whistleblower that can prove fraud is being committed, even if it is not with the government.
When You Recognize Fraud
If you have knowledge of fraud being committed within your company that falls under the guidelines of the False Claims or Frank-Dodd Act, it is your responsibility to make a claim. You will need the services of an experienced attorney, such as the attorneys at Goldberg Kohn, to file your claim to help ensure that your rights are protected.
You may need to request protection from prosecution if your job title was an active participant in the fraud. An attorney can help you get this protection under the whistleblower law. You will also need the assistance of an attorney to present the evidence to the U.S. Attorney.
If your case is found to be valid, and the government is able to reclaim a portion of the money it has been defrauded, you will receive a portion of this money as a reward. Recently, the Securities and Exchange Commission (SEC) just rewarded a whistleblower 94 million for their claim.
It is very important that employees who have this knowledge make a stand and share their knowledge of the fraud. Not only are you stopping a crime, you are making a large difference in the lives of every other American, which can make a significant difference within today's real estate market.