SEC Whistleblower Program

In July 2010, in response to the 2008 financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act, known colloquially as “Dodd-Frank.” One of the most important components of this broad overhaul of the U.S. financial regulatory system was enactment of the SEC Whistleblower Program. The Whistleblower Program encourages those with knowledge of violations of securities laws to share this information with the SEC by providing monetary incentives and protection against retaliation by employers.

As described further below, the SEC Whistleblower Program has several critical requirements that must be strictly followed or a whistleblower may be denied an award. Accordingly, it is important to retain experienced counsel to navigate the process and ensure compliance with the law. Retaining an experienced attorney has the added benefit of permitting SEC whistleblowers to maintain their anonymity even in their dealings with the SEC.

The SEC Whistleblower Program, created by Dodd-Frank, falls within a panoply of whistleblower laws designed to protect the public fisc and private investors by encouraging those with knowledge of fraud to alert the authorities. The Constantine Cannon Whistleblower Lawyer Team has over 100 years of experience representing whistleblowers under these laws, including the qui tam provisions of the False Claims Act, the Dodd-Frank Act, the IRS Whistleblower Law, and the vast array of other federal and state whistleblower laws.

What distinguishes us from other whistleblower lawyers and whistleblower law firms is our unmatched combination of attorneys with a long and unsurpassed track record of whistleblower successes, our substantial resources to handle any type of case against any size defendant in any industry, our international reach, and our depth of experience in both whistleblower litigation and government enforcement.

Examples of Fraud Covered by the SEC Whistleblower Program:

Below are just a few examples of conduct that may be covered by the SEC Whistleblower Program:

  • Ponzi schemes
  • Insider trading
  • Violations of the Foreign Corrupt Practices Act (“FCPA”)
  • Front-running
  • Accounting fraud
  • Unauthorized trading
  • Bribery
  • Market manipulation
  • Improper promotion and sale of risky investments
  • Skimming or other improper diversion of funds
  • Illegal naked short selling
  • Boiler room or “pump and dump” schemes
  • Misrepresentations made in connection with sales of securities or commodities
  • Misleading statements or failure to make necessary statements in public filings

Key Features of the SEC Whistleblower Program

  • Whistleblowers may receive awards of up to 30% of any government recovery based on the information provided. In determining the award percentage, the SEC considers factors such as the significance of the whistleblower’s information and the extent of the whistleblower’s assistance.
  • Whistleblowers, if represented by counsel, may remain anonymous when providing information to the SEC. The SEC also subscribes to a policy of maintaining whistleblower confidentiality when announcing settlements and making awards.
  • Whistleblowers are generally entitled to protection from retaliation by their employers based on their reporting of securities violations.
  • There is no requirement that any government entity be financially harmed by the complained-of conduct.
  • Whistleblowers in the SEC program submit their information directly to the SEC, they do not file a complaint in federal court.
  • Whistleblowers do not have to be “insiders.” They may receive awards based on their independent knowledge or independent evaluation of publicly-available information.
  • Whistleblowers do not have to be U.S. citizens or residents. Further, the illegal conduct doesn’t have to have taken place in the United States, as long as it affects the U.S. market.
  • Whistleblowers may receive an award even if their information relates to an existing SEC investigation, if the additional information significantly contributes to the SEC’s success in the enforcement action.
  • However, whistleblowers cannot continue a claim privately if the SEC chooses not to pursue the case.