SEC Whistleblower Claims On Fraudulent Private Placements

Private placements, which offer securities to accredited investors without the disclosure requirements of public offerings, can be a powerful tool for many companies to raise money when they need it. The more relaxed rules for private placements also mean there’s greater potential for fraud in these securities—and a higher level of risk for investors.

If you see signs of fraud with a private placement—the offering company is trying to convince investors that the investment is a “sure thing,” for instance, or approaching investors who aren’t accredited—it’s important to speak up about it. Here are just a few of the reasons to come forward:

Reporting fraud protects investors.
In a fraudulent private placement, investors risk losing the money they put into the company—money that might represent their retirement savings or their kids’ college fund. They worked hard to earn it, and could lose everything in a fraudulent investment. Speaking up helps to shield investors from negative consequences.
Reporting fraud protects your company.
If you work for an investment company that is offering a fraudulent private placement to investors, speaking up about it could protect the company by giving management a chance to stop the deception before anyone is hurt by it. Your company may still be held responsible to some extent, but by speaking up, you may prevent significant SEC fines or even criminal charges against your firm’s management.
Reporting fraud is the right thing to do.
Protecting investors and your company helps to deter bad actors from making more fraudulent offerings down the road. It also reinforces the principle of honesty and fair dealing throughout the industry. Not only does taking a stand when you know something is wrong feel good, you may even receive a whistleblower bounty from the SEC. Your courage, and its positive effects, will be an inspiration to other whistleblowers.

How To Speak Up

Raising your hand when you see signs of potential fraud is never easy, but it is the right thing to do. If you have knowledge of a fraudulent private placement, it’s important to say something—as soon as possible.

Depending on the situation, you might start by speaking to your manager, if you work for a company involved in the offering, or someone at the company offering the private placement. If the situation isn’t resolved after you report it, or if you feel speaking to someone within your organization could jeopardize your position there, contact an attorney who specializes in SEC whistleblower cases for advice.

The attorneys at Silver Law and the Law Firm of David R. Chase can help you determine whether you have a legitimate SEC whistleblower concern. We can guide you through the process of reporting it to the SEC and assist with gathering evidence to show that a securities violation has occurred. Thanks to our firm’s proficiency and experience, we know how to provide information to the SEC in a way that will increase the likelihood of an SEC investigation—and, potentially, a whistleblower bounty.

Silver Law Group and the Law Firm of David Chase have created a strategic alliance to represent SEC whistleblowers who are aware of problems with a private placement or another violation of SEC regulations. We have years of experience representing SEC whistleblowers, and are proud to have an SEC enforcement lawyer on our team. With our in-depth understanding of how the SEC Whistleblower Program operates, we’re here to help. For a free, confidential consultation, contact us online or call us today at (800) 975-4345.