The Securities and Exchange Commission entered a cease-and-desist order and Ocwen agreed to pay a penalty of $2 million for misstating its financial results. The SEC investigation found that while Ocwen told investors it had independently valued its complex mortgage assets at fair market value under U.S. Generally Accepted Accounting Principle, it was in fact using a flawed, undisclosed methodology to value those assets. As a result, Ocwen misstated its net income for the last three quarters of 2013 and the first quarter of 2014.
Our client submitted a tip to the SEC whistleblower program that led to this recovery. He filed it anonymously as allowed by the SEC. He was awarded 26% of the total settlement because his tip enabled the SEC to bring multiple enforcement actions against wrongdoers (see related settlement against Home Loan Servicing Solutions, Ltd.) that were settled for a total of $3.5 million.
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