September 23, 2019

September 23, 2019

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September 20, 2019

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Critic of High-Frequency Trading Receives SEC Whistleblower Bounty Award

According to a MarketWatch report, Eric Hunsader of Nanex LLC has identified himself as the recipient of a more than $700,000 Dodd-Frank whistleblower bounty award.  According to Hunsader, the information he provided to the SEC led to a $5 million fine of the New York Stock Exchange.

As we recently reported, on January 15, the SEC announced that it had rewarded an unidentified whistleblower who provided “detailed analysis” to the agency.  The SEC is prohibited from publicly identifying the whistleblower receiving the award but Hunsander elected to publicly identify himself as the award recipient.

Hunsader’s award is the first whistleblower award issued by the SEC to an independent third party for analysis (as opposed to insider information) of a potential securities law violation.  Andrew Ceresney, Director of the SEC’s Enforcement Division, explained in the agency’s press release announcing the award that, “[t]he voluntary submission of high-quality analysis by industry experts can be every bit as valuable as first-hand knowledge of wrongdoing by company insiders.”  Ceresney further explained that the agency intends to “leverage all forms of information and analysis [it] receive[s] from whistleblowers to help better detect and prosecute federal securities law violations.”

According to the SEC, its whistleblower program has paid more than $55 million to 23 whistleblowers since the program’s inception in 2011.  This first award to an industry critic will no doubt incentivize other industry watchdogs to submit information to the SEC about potential securities laws violations.

© 2019 Proskauer Rose LLP.


About this Author

Harris M Mufson, Class/Collective Action Attorney, Proskauer
Senior Counsel

Harris Mufson is a senior associate in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration and Whistleblowing & Retaliation Groups.

Adept at counseling clients at every turn of the litigation process, Harris represents employers in a variety of industries, including financial services, health care, entertainment, sports and legal, with respect to a wide range of labor and employment law matters. These include compensation disputes, employment discrimination and retaliation, whistleblowing,...

Emilie Adams, Employment Litigator, Proskauer Law Firm

Emilie Adams is an associate in the Labor & Employment Law Department and a member of the firm’s Employment Litigation & Arbitration Group.

Emilie represents employers in all aspects of employment litigation, including but not limited to restrictive covenant and wage and hour issues, and the investigation and litigation of harassment, discrimination, and retaliation claims. 

Emilie also counsels clients on a variety of employment matters, including employment contracts and separation agreements, restrictive covenants, and employment policies and handbooks.