The year 2021 ended with hundreds of million dollars in whistleblower rewards under the SEC and CFTC whistleblower programs. Both agencies have brought many blockbuster enforcement actions against crypto fraudsters over the past couple of years. They have both started making going after crypto-fraudsters a priority as the number of digital currencies continues to grow. This year, two cryptocurrency-related recoveries were among the largest. Here are the Top Three SEC and CFTC recoveries of 2021:
- Benjamin Reynolds and Control-Finance
With the largest enforcement action recorded for the year, the CFTC ordered Benjamin Reynolds, conducting business as Control Finance, to pay nearly $143 million in restitution to defrauded customers and a civil monetary penalty of $429 million for a combined total of $572 million. The USDC for the Southern District of New York found out that Reynolds operated a fraudulent scheme to solicit Bitcoin from members of the public and misappropriated customers’ bitcoin. The defendant would use a public website and social media account, and email communications to solicit at least 22,190.542 bitcoin, valued at $143 million at the time. These solicitations were made to more than 1,000 customers around the world, including 169 of them residing in the U.S.
- GTV Media Group Inc., Sacara Medica Group Inc., and Voice of Guo Media Inc.
The second biggest settlement for the year was an SEC enforcement action that successfully charged three media companies with illegal offerings of stock and digital assets. The companies are New York City-based GTV Media Group Inc. and Sacara Media Group Inc., and Phoenix, Arizona-based Voice Guo Media Inc. These companies conducted an illegal unregistered offering of GTV common stock and an unregistered offering of a digital asset security referred to as G-Coins or G-Dollars. The respondents agreed to pay more than $539 million to settle the SEC’s action against them.
- J.P. Morgan Chase
Our third place for 2021 was J.P. Morgan Chase joins the list for its $200 million settlement with the SEC and CFTC. The company will pay $125 million as an SEC penalty and $75 million as a CFTC penalty to resolve claims for widespread and long-standing failures by the firm and its employees to maintain, preserve, and produce records that were required to be kept by the agencies recordkeeping requirements. In addition, JPMorgan employees, including senior level ones, communicated both internally and externally on unapproved channels, including text messages and Whatsapp messages.
Do you have a valid claim?
If you witnessed any widespread suspicious activity within your workplace, you might have a chance of becoming a whistleblower by reporting an ongoing fraudulent scheme. However, to increase your chances of success, you must be sure to back up your claim with substantial evidence or privileged information.
A Quick Whistleblower Checklist
Is the fraudulent scheme widespread enough?
Has the fraud been perpetuated for years or involves large sums of money?
Do you possess any physical evidence of the fraud (documents, forged signatures)?
Do you have access to privileged information which may help our investigators?
Do you work as an insider within the company perpetrating the fraud?
Did you witness any ongoing illegal behavior within your workplace?
Have you been forced into taking part in any suspicious corporate activity?
