The Government Has Developed a Solution to Insider Trading Through the Sec Whistleblower Program

For the longest time, insider trading in the securities market has always been an issue and the U.S Securities and Exchange Commission has been trying to find the best method of eliminating this unlawful practice. The law enforcement was found ineffective in policing the market unless they got help from private individuals. It is after this realization that changes in the securities market enforcement started through the introduction of the SEC Whistleblower Program.

 

After the market experienced the financial crisis of 2008, they were a need to regulate the financial markets. Therefore, in 2010 the Congress met and introduced the Dodd-Frank Act which was meant to create financial stability in the country. The act became law in 201o and among its provisions was that the SEC has the power and mandate to develop a whistleblower program that would be offering rewards to the members of the public who would provide reliable information of insider trading. The reward will be offered if the information provided leads to the SEC carrying out an enforcement action and the perpetrator is liable to pay more than $1 million in penalties and sanctions.

 

The program offers employment protection to the whistleblowers or an individual could choose to report insider trading anonymously. However, the enforcement office of this program only launches an investigation of original information only. This means that it should not be a case already known to the commission. If another person has provided the SEC with the information previously, then its no longer considered original information. The information should also not be publicly available.

 

The information should also be sufficient to motivate the SEC to take action on the individuals involved. Or it should be details that could influence the Whistleblower Program to re-open a case that has previously been closed or offers the regulatory body a new line of pursuit. The violation could be reported at any time whether they happened in the past, are happening presently or are likely to happen. They cover instances of deceptive conduct in stock trading, bonds, notes to mention few. Even individuals from other countries around the globe can report cases of insider trading to the Whistleblower Program.

 

The reward is given once the case is completed and it ranges from 10-30 percent of all the money paid by the guilty party. However, the reward is only given if the amount paid is over $1 million. So far, the Whistleblower Program has awarded many whistleblowers to amount totaling to millions of dollars.

Boss Investments Wanted To Do Business With Margaritaville

Margaritaville’s Bahamian franchisee has refiled its lawsuit in Florida state courts. It is still working to block the $250m Pointe project. The US attorneys representing Boss Investments have released a statement that the company is still pursuing Margaritaville for breach of contract. The US federal judge dismissed the action and it has now been filed in a Palm Beach County courthouse.

Reason For Dismissal

Todd Levine and Adam Steinberg said the federal judge dismissed the action due to a legal technicality, but all legal options of Boss Investments were not exhausted. Todd and Adam said their client, Boss Investments was looking forward to the deal with Margaritaville, to bring the brand to The Bahamas. They entered into an exclusive agreement allowing Boss to use Jimmy Buffet and Margaritaville trademarks in The Bahamas.

Changing Course

Margaritaville has mentioned the exclusivity in dealings before. Not long after Boss had a successful opening of Paradise Island, Margaritaville reneged on the deal, and partnered with another company to launch a huge Margaritaville resort only miles away from the initial Boss Investments location. The action by Margaritaville, is clearly a breach of contract and Boss is within its contractual rights for filing the lawsuit in Florida state court.

Already In Violation

The US federal court did not rule on the case, and threw it out based on the lack of jurisdiction to hear the case. Now the case will be heard under Florida state law. There are two of the Margaritaville entities listed as defendants. They have offices in Palm Beach County. It is alleged that Margaritaville is already in violation of its own exclusive right to use trademarks and intellectual property in the Bahamian area. This is according to the company’s deal with China Construction America’s downtown Nassau resort next to British Colonial Hilton. According to Boss Investments, Margaritaville discouraged it from starting an additional restaurant by Nassau’s port to safeguard the plans for The Pointe.

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