SEC Whistleblower Program

In the summer of 2010, the U.S. Congress passed a sweeping financial regulatory overhaul as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act which included whistleblower provisions for violations of the nation’s securities laws. Under this law, a whistleblower program administered by the Securities and Exchange Commission (SEC) allows people who report securities fraud to receive a financial reward if the SEC collects any monetary sanctions over $1 million. However, unlike other whistleblower statutes, SEC whistleblowers do not have to file their own lawsuit; rather, violations are reported directly to the SEC. SEC whistleblowers may make anonymous reports to the SEC, but in order to do so, they must be represented by an SEC whistleblower lawyer.

Fraud Covered by the SEC Whistleblower Program

Types of fraud covered by the Dodd Frank Act’s SEC whistleblower provisions include:

  • Manipulation of stock price or volume;
  • Billing irregularities;
  • Misreporting sales;
  • Insider trading;
  • Theft;
  • Bribery of foreign officials or other violations of the Foreign Corrupt Practices Act;
  • Public Company Misstatements, including accounting fraud and material misstatements and omissions that might influence or change the decisions of investors or financiers;
  • Asset Management Fraud, including fraud involving investment advisors, investment companies, hedge funds, and private equity funds;
  • Municipal Securities and Public Pension Abuse, including offering and disclosure fraud, tax or arbitrage-driven fraud, pay-to-play and public corruption violations, public pension accounting and disclosure violations, and valuation and pricing fraud; and
  • Any type of fraud that results in economic harm.

SEC Whistleblower Rewards

Under the SEC whistleblower program, whistleblower may receive 10 percent to 40 percent of any monetary sanctions collected by the SEC if the sanctions exceed $1 million. Factors used to determine the whistleblower reward include:

  • The significance of the information provided;
  • The assistance provided by the whistleblower and the whistleblower’s attorney; and
  • The “programmatic interest” of the SEC “in deterring violations of the securities law.”

SEC Whistleblower Protections

Job Protections: The Dodd Frank Act specifically states that employers may not fire, demote, suspend, threaten, harass, or discriminate against a whistleblower. Whistleblowers who suffer from employment retaliation may sue for reinstatement, back pay and any other damages that occurred. However, to qualify for whistleblower protection, the SEC’s rules require that you prove that your employer was on notice of your complaint and that your complaint was a “contributing factor” that led to the retaliation.

Confidentiality: SEC whistleblowers are allowed to report fraud anonymously. However, to qualify for confidentiality, the SEC’s rules state that you must file your whistleblower complaint through legal counsel. Additionally, the identity of a whistleblower must be revealed only prior to the payment of an award.

Legal Help for SEC Whistleblowers

Gilman Law LLP is one of the top securities fraud law firms in the U.S. and possesses a broad range of experience representing SEC whistleblowers. If you’re looking for help exposing securities fraud and corporate corruption, please contact the whistleblower lawyers at Gilman Law today for your free and confidential case evaluation by completing our online form on the left or call Toll Free at 1-888-252-0048.