WHISTLEBLOWER PAYDAY COMING SOON!

The SEC is expected to pay hundreds of millions of dollars to whistleblowers very soon. In fact, according to a New York Post article, "SEC set to hand out up to $452M to whistleblowers." Whistleblowers can collect from 10 percent to 30 percent of what the government recovers when a tip has helped the government obtain the recovery. So far, tips have exposed all manner of corporate wrongdoing, ranging from insider trading and rigged bonds deals to cover-ups of cooked books and bribes. SEC officials are eager to pay out and publicize the first whistleblower award, as they anticipate the news will result in a flurry of new tips.

A case against Wachovia Bank is illustrative of how the program works. Last December the bank paid a penalty of $25 million to settle a probe into rigging municipal bond sales. If a whistleblower's tip helped the SEC bring the case, it could be worth up to 30 percent of the SEC's take to the whistleblower - or $7.5 million.

Other large whistleblower awards could flow from the following SEC recoveries, among others:

• $92.8 million in penalties from convicted hedge fund boss Raj Rajaratnam,

• $59.6 million from Hungarian telecom Magyar Telekon to settle charges of bribing officials,

• $22 million from RBC Capital Markets to settle a probe into rigging muni bond deals, and

• $32.5 million from JP Morgan Securities to end a probe into irregularities in bond sales.

SEC investigators received nine tips per day on average during the first two months the program was launched.

The whistleblower program, a product of Dodd Frank legislation, may be the best strategy the SEC has deployed since it has been formed. People now have an incentive to report fraud. The tipsters can remain confidential and justice can be served at the same time through attorney representation. Robert Pearce, a former SEC Enforcement Division attorney, has close ties with the Division and his firm is well equipped to represent confidential informants and secure their reward for helping to protect the integrity of the financial markets!

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

DID WALL STREET RIP-OFF UNITED STATES FACEBOOK INVESTORS?

Troubling signs that emerged days before the IPO were hidden from the public by Wall Street, according to an article in The Motley Fool by Eric Bleeker entitled "The Tragedy of Facebook: How Wall Street Robbed Main Street." While Wall Street helped Facebook promote its IPO, and brought it public at a falsely elevated price, analysts at the underwriter firms cut their earnings estimates for Facebook. That was unprecedented for an IPO. But it was only disclosed to a few favored clients, while the rest, who were encouraged to buy Facebook stock in the IPO, were kept in the dark. The banks' analysts apparently didn't even cut their estimates based on their own due diligence. A Facebook executive had to tell them they should cut their estimates, according to the article.

After Facebook shares popped up, and then quickly began to sink, while Morgan Stanley, the lead underwriter, was buying shares to try to temporarily prop up the price, underwriters Goldman Sachs and JPMorgan were lending out Facebook shares to be sold short by the few institutional clients who had been tipped off about Facebook's lowered earnings estimates, further exacerbating the slide. So much for Wall Street's claim that it can manage its conflicts of interest while millions of dollars are in play.

Morgan Stanley's buying of Facebook shares did not result in a loss for Morgan Stanley. It sold more shares into the IPO than it bought, and therefore made a profit even though Facebook shares plummeted. Indeed the Wall Street underwriters made $100 million from trading Facebook as retail investors lost $630 million and counting. Thus Wall Street wins even if investors lose because the game is rigged against the investors and in favor of Wall Street.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Mr. Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Our law firm is devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.