Expose Corporate and Financial Reporting Fraud by Partnering With Our Securities Fraud Attorneys

Corporate and financial reporting fraud undermines the accuracy and integrity of the information that investors, regulators, and the public rely on to make sound decisions. Whistleblowers with firsthand knowledge of these schemes are often essential to bringing them to light.

• Accounting fraud, reporting false information to regulators and the public, front companies, and shell company schemes are among the most common forms of corporate and financial reporting fraud.
• Whistleblowers can report these schemes under the SEC Whistleblower Program and may be eligible for significant financial rewards. If a fraud involves a government contract, whistleblowers may also be able to file suit under the False Claims Act.
• Anyone with knowledge of corporate or financial reporting fraud—including employees, accountants, auditors, competitors, or other industry participants—may qualify as a whistleblower.

If you have witnessed or discovered corporate or financial reporting fraud, you do not have to stand up for justice on your own. Reach out to our experienced attorneys at Whistleblower Partners LLP for comprehensive guidance on how to blow the whistle on these illegal practices.

Common Types of Corporate and Financial Reporting Fraud

The following are among the most prevalent types of corporate and financial reporting fraud that whistleblowers have helped expose.

Accounting Fraud

Accounting fraud involves the manipulation of a company’s financial statements to present a misleading picture of its financial health. Common techniques include exaggerating assets and revenue, misrepresenting expenses or liabilities, and improper revenue recognition—such as fictitious sales, “channel stuffing” (where a company ships excess supply to distributors and books the distributions as sales), or prematurely booking revenues. Companies may also manipulate their expenses, for example, by improperly capitalizing costs so they can be treated as depreciating assets, thereby delaying recognition of the expense.

Because of their access to financial records, accountants are often well-positioned to detect not only accounting fraud but other forms of misconduct as well—including misappropriation of assets, securities and commodities fraud, and false billings to the government. Accountants can also report misconduct at their own firms. In recent years, the SEC has brought numerous enforcement actions against major accounting firms, including a $100 million settlement with EY over ethics exam cheating and a $50 million settlement with KPMG over the misuse of stolen audit inspection information.

Although financial reporting frauds predominantly fall under the SEC’s jurisdiction, every major U.S. whistleblower program accepts tips from accountants, including the SEC, CFTC, IRS, and FinCEN Whistleblower Programs, as well as the False Claims Act. Each program has unique features, and an experienced attorney can help determine which avenue is best suited to a particular matter.

Reporting False Information to Regulators and the Public

Public companies and other regulated entities are required by law to make accurate and complete disclosures to regulators and the investing public. Reporting fraud occurs when companies knowingly submit false or misleading information in SEC filings, earnings releases, regulatory reports, or other public communications. This can include overstating revenues or minimizing liabilities in annual and quarterly reports, making false certifications to the SEC, or issuing misleading press releases about a company’s financial condition or business prospects. These misrepresentations deprive investors of the accurate information they need to make sound decisions and can artificially inflate or deflate a company’s stock price to the benefit of insiders and the detriment of ordinary investors.

What Role Do Whistleblowers Play?

Whistleblowers play a vital role in helping the SEC and other regulators uncover corporate and financial reporting fraud. Because these schemes are often carefully concealed within complex corporate structures or accounting records, regulators frequently depend on insiders—employees, accountants, auditors, or others with firsthand knowledge—to bring them to light. Whistleblowers who report through the SEC, CFTC, IRS, or FinCEN Whistleblower Programs, or who file suit under the False Claims Act, may be eligible for significant financial awards.

How Can You Blow the Whistle?

You can report corporate or financial reporting fraud by making a tip to the SEC Whistleblower Program or another applicable program, or by filing a False Claims Act lawsuit if government funds are involved. If you are unsure whether the conduct you have witnessed rises to the level of illegal activity, or where you should file, it is a good idea to consult with an attorney experienced in securities and financial fraud. Whistleblower Partners has the breadth of knowledge and experience to present these complex and difficult cases to the government and bring them to a successful resolution for our whistleblower clients.