What You Need to Know About SEC Whistleblower Awards

March was a Big Month For Whistleblowers

Under the SEC Whistleblower Program, whistleblowers who voluntarily provide information to assist the U.S. Securities and Exchange Commission in recovering monetary sanctions over $1 million for securities law violations are eligible to receive awards of 10%-30% of the money collected.  In providing this incentive, the SEC recognizes that whistleblowers are uniquely qualified to help it identify possible fraud early and allow the SEC to minimize harm to investors, preserve the integrity of the country’s capital markets, and hold accountable those responsible for unlawful conduct.

“Whistleblowers provide a critical public service and duty to our nation, taking personal and professional risks in doing so. Since the program’s inception, enforcement matters brought using information from whistleblowers have resulted in more than $1.3 billion that has been (or is scheduled to be) returned to harmed investors.”

Gary Gensler, Chairman and Chief of the SEC

Thus far, in fiscal year 2022, the SEC has awarded close to $164 million “to whistleblowers who provided high-quality information and assistance that led to the success of enforcement actions.”

What types of wrongdoing can you submit to the Whistleblower Program?

If you are aware of any of the following activities, you can submit a tip to the SEC:

  • Accounting Fraud
  • Bribery of foreign officials and FCPA violations
  • Failure to file required reports with the SEC
  • False or misleading statements about a company or investment
  • Fraudulent or unregistered offer or sale of securities
  • Improper revenue recognition
  • Inadequate internal controls
  • Insider trading
  • Manipulation of a security’s price or volume
  • Ponzi schemes
  • Theft or misappropriation of funds or securities

You may have knowledge of this wrongdoing through your business relationships or social interactions. This information can be derived from your independent knowledge or independent analysis of publicly available information. While being an eyewitness or having evidence of a securities violation is ideal, it is not required.

Are you eligible to receive a whistleblower award?

Virtually anyone can participate in the SEC Whistleblower Program. A whistleblower can be a corporate insider or outsider, does not need to be an employee of the company they are blowing the whistle on, and can be a citizen of any country. As long as the following elements are satisfied, you can receive a monetary award for doing the right thing.

Eligibility Factors:

  • The information was original and unknown to the SEC
  • The tip was provided voluntarily, before the agency reported the information
  • The submission led to a successful enforcement action resulting in monetary sanctions exceeding $1 million

Taking the first step

The first step to qualifying for a whistleblower award is to submit a tip to the SEC. The SEC protects the confidentiality of all whistleblower tips. A whistleblower who wants to submit an anonymous tip must be represented by an attorney in connection with the submission of information and claim for an award. The attorney’s name and contact information are provided to the SEC in lieu of the whistleblower’s at the time the whistleblower submits the information.

If you have information about an activity included under the SEC Whistleblower Program, please contact Robbins LLP for a confidential consultation.

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