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SEC gives over $700,000 reward to a whistleblower of high frequency trading: report
The US regulator is awarding more than $700,000, to a whistleblower who conducted a detailed analysis that led to a successful SEC enforcement action against NYSE 
 
Eric Hunsader, a vocal critic of high-frequency traders, had said the Securities and Exchange Commission is sending him a $750,000 whistleblower award, says a report from MarketWatch.
 
According to the report , Eric Hunsader of Nanex LLC provided information to the SEC that led to a first ever fine against an exchange. "On 15 January 2016, the SEC  confirmed it would pay 'more than $700,000' to a whistleblower that had provided the 'independent analysis as well as independent knowledge of securities law violations' that led to a $5 million fine for the New York Stock Exchange in 2012," the report says.
 
In a release, Andrew Ceresney, Director of the SEC’s Enforcement Division, said, "The voluntary submission of high-quality analysis by industry experts can be every bit as valuable as first-hand knowledge of wrongdoing by company insiders. We will continue to leverage all forms of information and analysis we receive from whistleblowers to help better detect and prosecute federal securities law violations.”
 
By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.
 
However, Hunsader showed MarketWatch a letter from the SEC that confirmed the approval of his award and told MarketWatch he was the recipient of a pending award for the tip that led to the NYSE fine. This is the first whistleblower award by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to reward an independent third party for analysis of a potential securities law violation, the report says.
 
The SEC’s whistleblower program has paid more than $55 million to 23 whistleblowers since the program’s inception in 2011. Whistleblowers who voluntarily provide the SEC with unique and useful information that leads to a successful enforcement action may be eligible for an award.  Whistleblower awards can range from 10% to 30% of the money collected when the monetary sanctions exceed $1 million.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money is taken or withheld from harmed investors to pay whistleblower awards.

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COMMENTS

Meenal Mamdani

9 months ago

I urge India's tax service to institute such a whistle blower program.

If the identity of the whistle blower is kept confidential, the tax service will be able to catch a lot of people like doctors, lawyers, retail shop owners, for under-reporting their income.

The award should be given high publicity to encourage many more to keep a close watch on the wrong doers.

manoharlalsharma

9 months ago

only JEWELER can acknowledge the true value of DIMOND but,poor country like ours do not know price of INTELLIGENCE.

7 flaws in the government’s EPF Tax
The government has failed to think through the implication of the new tax proposal of pension plans. Instead of creating uniformity, it has created more disparity
 
Finance Minister Arun Jaitley, in the union Budget 2016, announced “measures for moving towards a pensioned society.” Towards this goal, he believed “that the tax treatment should be uniform for defined benefit and defined contribution pension plans.” While the government may be moving towards uniformity, it seems they did not think through their statements and ideas enough which led to issuing contradictory clarifications and then considering a partial roll back. Moneylife highlights seven points that are flawed and contradictory in the government’s goal and their proposal.
 
1. A “uniform pensioned society” for only 6 million out of 37 million EPF subscribers
In its clarification, the Ministry of Finance (MoF) stated that “out of around 3.7 crores contributing members of EPFO as on today, around 3 crore subscribers” are within the statutory wage limit of Rs15,000 per month. For this category of people, there is not going to be any change in the new dispensation.” This effectively means that 80% of the EPF subscribers will be out of the new proposal. Why does the government want uniformity for just 20% of the salaried society?
 
2. Do highly-paid employees need pension security?
The MoF states that, “here are about 60 lakh contributing members who have accepted EPF voluntarily and they are highly - paid employees of private sector companies.” The new EPF tax proposal will apply to this section of employees. According to the government, “such employee can withdraw without tax liability provided he contributes 60% in annuity product so that pension security can be created (emphasis added) for him according to his earning level. However, if he chooses not to put any amount in Annuity product the tax would not be charged on 40%.”
 
Do “highly-paid” individuals need to be indirectly forced to subscribe an annuity product for “pension security”? Can’t they decide what is good for them? Don’t the people earning less than Rs15,000 actually need the “pension security”? Secondly, if a person does not wish to invest in low return annuity products, why penalise him by taxing 60% of the corpus? How does help in “financial protection to senior citizens”?
 
3. Confusion about wage limit of Rs15,000 per month
The MoF states that, “the main category of people for whom the EPF scheme was created are the members of EPFO who are within the statutory wage limit of Rs.15,000 per month.” It is not clear how this rule applies. Manoj Nagpal CEO, Outlook Asia Capital, in a tweet to Jayant Sinha, Minister of State for Finance, and revenue secretary Hasmukh Adhia, asks as to how this Rs15,000 determined. Is it on the salary of the employee when he joins the EPFO, or the average salary of the employee over 35 years, or is it the salary at retirement?
 
Some interpret it as when an individual’s salary is less than Rs15,000, there will be no tax on contribution, and when the salary crosses Rs15,000 tax will apply on the contribution from then. This leads to immense confusion and one will need to track his salary as well from now on to calculate the corpus, which will fall under this provision. Here again, there is no parity with NPS, where even the general public can invest.
 
4. If the statutory wage limit of Rs15,000 per month applies for EPF, why not NPS?
The government’s goal of creating a uniform pensioned society is not achieved. With the government trying to promote the National Pension System (NPS) aggressively, why does the statutory wage limit not apply to employees contributing to NPS? The government offered a tax break for NPS subscribers, and ended up taxing EPF as well. This does make NPS a contender among other retirement products with the much needed tax break, but why have differential rules when trying to create uniformity among pension products. If employees get to choose between EPF and NPS, those with a salary of less that Rs15,000 pm, may most probably choose EPF because of safety and the tax break.
 
5. Different tax rules for products which invest in similar asset classes
Among the Section 80C eligible investments, if you invest in an equity-linked savings schemes (ELSSs) or growth-oriented mutual fund retirement plans, where equity allocation is greater than 65%, long term capital gains are tax free. If you invest in the income-oriented plans of mutual fund retirement plans, long term capital gains are taxed at 20% with indexation. Even the corpus under unit linked insurance plans (ULIPs) and traditional insurance plans are tax free, subject to certain conditions. However, under NPS—a similar product in which the subscriber can invest up to 50% in equity—only “40% of the total corpus withdrawn at the time of retirement will be tax exempt”.
 
PPF is tax-free, while under the new proposal, only 40% of the EPF corpus will be exempt from tax. Both these pay a similar rate of interest.
As it is, investors are left confused with the hoards of different financial products. Why is the government differentiating between taxation of similar financial products adding to the confusion of savers?
 
6. No clarity on NPS proposal
The budget mentions that only for employees contributing to NPS, 40% of the corpus will be exempt from tax. Does this mean that if anyone who voluntary contributes to NPS will not be eligible for this tax benefit? Does it mean that the proposal is only applicable for the corporate NPS model? The budget memorandum states “any payment from National Pension System Trust to an employee on account of closure or his opting out of the pension scheme referred to in Section 80CCD, to the extent it does not exceed forty percent of the total amount payable to him at the time of closure or his opting out of the scheme, shall be exempt from tax.” Why is there a benefit given only to corporate employee? What if a self-employed professional wishes to contribute to NPS, why should he not get a tax benefit?
 
7. Rule does not apply to employees of government and semi-government organisations local authorities, railways, universities and educational institutions and are exempt
 
The EPF tax proposal is applicable to only private sector employees. This means that all other employees, of government and semi-government organisations, local authorities, railways, universities and recognised educational institutions are exempt from this. Here again there is no uniformity in applicability of the provision.
 
All these flaws were compounded with the ham-handed manner in which the clarifications were offered. In an interview to NDTV, when asked whether the proposal applies to PPF, Jayant Sinha stated that this rule will be applicable to all pension funds, leading to the conclusion that PPF will be taxed. Later, in another interview, Mr Hasmukh Adhia clarified that PPF will be exempt. However, he surprised everyone by saying that only the interest on 60% of the contributions will be taxed. A clarification issued later stated that they are only considering this proposal.
 
The revenue secretary Hasmukh Adhia even claimed that the tax “will be only on the interest component and not on the principal. If a change has to be made in the finance bill, then we will do it to clarify that the entire corpus will not be taxed but only the accumulated return component.” The clarification issued by the MoF contradicted him stating that “We have received representations today from various sections suggesting that if the amount of 60% of corpus is not invested in the annuity products, the tax should be levied only on accumulated returns on the corpus and not on the contributed amount. The Finance Minister would be considering all these suggestions and taking a view on it in due course.”
 
This just goes to show that there is much confusion among the government itself in understanding the proposal. The government has not only, not thought through the concept, but it also remains that nobody knew what exactly the rules were. 

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COMMENTS

Raja Laks

9 months ago

In another article before budget, I commented Arun Jaitely is a Congress minister who has no integrity and doesn't care about social media or 'mango' men.
This is proved.
Arun Jaitely is just a corporate broker. Even Modi cannot influence him. AJ responds only to Ambani/Adani.
Kill the legitimate tax payers from private sectors in all possible ways. Continue like this and next election, people will vote for Rahul Gandhi. Thats exactly what Arun Jaitely wants.

Kamal Garg

9 months ago

One of the most horrendous tax proposal ever seen in India. This Govt is hell bent on squeezing every penny from its citizens in the name of tax collection.
(1)Is this the way for reducing or containing your fiscal deficit target.
(2) What about expenditure efficiency. Has any body bothered about the forever grant of Pay Commission without bothering about the efficiency and work output.
(3) This Govt wants people to surrender LPG subsidy. What about MPs getting highly subsidised food in Parliament Canteen at a throwaway prices.
(4) In any case, whether you withdraw balance 60% as lump sum or in the form of annuity, in both the cases, one has to pay tax on the full amount. In the first case, one has to pay full 30% tax immediately. And in the second case, still one has to pay marginal tax on monthly annuity paid.
This Govt has disappointed its citizens on every count in the last two years.
It seems that Arun Jaitley can never get his maths and policies right. Most of his Policy announcements have failed only because he has no idea of grass root working in this country.

nginx

9 months ago

The answer to all these questions is simple. The government is talking out of its ass, trying to justify squeezing even more tax from the already beaten down salaried middle class because it's too gutless to widen the tax base by bringing in business moguls and sharks into the tax net.

Beena Kothari

9 months ago

This is a very bizarre point came up in this product. People who earn more than Rs. 15,000 and making voluntary contribution to PF are wise enough to plan life after retirement. Its unfair to put force by the government as to how they want to make an investment of that corpus. This should change. I wish this was thought through rather than creating confusion in the name of "beneficial policy change towards pension society"!!

SUJIT TALUKDER

9 months ago

This is the Ache Din for the pvt sector employees. When govt fails to unearth black money, it has increased multi-layer taxation of the same income. Not only EPF, also taxation of dividend in excess of Rs 10.00 lakh is triply taxed. Once in the profit of the company, then DDT on the dividend declaration and then again on dividend recipient.
I don't understand how this govt. claims certainty in tax laws. This govt. measures are even more uncertain than the previous one.
And Mr Modi says, Acche Din Aa Gaye.

Anand Vaidya

9 months ago

I think the govt is JEALOUS that a part of the money they can see is not being taxed at any stage, and it burns them like concentrated acid.

So this hare-brained downright stupid plan was conceived....

tapan sur

9 months ago

If you cant convince, confuse?

SuchindranathAiyerS

9 months ago


Perhaps the Government deliberately introduced the ugly and vicious proposal in order to have something to retract?

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