SEC Whistleblowers

What Is the SEC Whistleblower Program?

If you have knowledge of violations of securities laws or of the Foreign Corrupt Practices Act, you might qualify for a reward under the SEC Whistleblower Program.

The U.S. Securities and Exchange Commission recently implemented a whistleblower program that rewards individuals who provide information about violations of federal securities and anti-foreign-bribery laws. 

The new program, which Congress directed the SEC to establish when it passed the Dodd-Frank Act in 2010, provides awards of 10 to 30 percent of the amount of sanctions and penalties the SEC imposes on wrongdoers as a result of a whistleblower’s information. These awards can be quite large, as the SEC has collected tens of millions or even hundreds of millions of dollars from some violators, depending on the severity and scope of the unlawful activities that the SEC uncovers.

Who Qualifies for SEC Whistleblower Rewards?

In order to qualify for an SEC whistleblower award, you must voluntarily provide the SEC with original information that assists the SEC in bringing an enforcement action that results in sanctions of more than $1 million. Here are some of the more important final rulesof the SEC Whistleblower Program:

• Your information must relate to a possible violation of securities laws or a bribe of a foreign official.
• You must provide the information voluntarily—that is, before the government or a self-regulatory organization has asked you for the information.
• The information must be based on your independent knowledge or independent analysis, and not certain public sources.
• Your tip must cause the SEC to initiate a new investigation or contribute significantly to an ongoing investigation.
• You may qualify for a reward even if you report your concerns to the company internally, and the company then “self-reports” the information to the SEC.
• The SEC might increase your reward if you first report your information through internal channels, but can reduce the reward if you impede the company’s internal investigation.

Who Does Not Qualify for SEC Whistleblower Rewards?

Under most but not all circumstances, the following are not eligible for rewards:

• Attorneys representing the company
• Company officers or directors who learn about violations in connection with internal compliance processes
• Public accountants working on SEC-required engagements
• Individuals who obtain their information through criminal means

Why Hire KMB For Your SEC Whistleblower Case?

If you believe you have information about securities violations or foreign bribes, contact the nationally recognized whistleblower attorneys at Katz, Marshall & Banks, LLP. Where appropriate, we can represent you in preparing and filing a strong submission that will maximize your chances of winning a substantial reward through the SEC Whistleblower Program. Your communications with us are confidential, and without charge or further obligation.