Question of the Week — Should the SEC expedite its review of whistleblower claims?
Good things come to those who wait—at least that’s what most experienced whistleblowers will tell you. Whether they filed a complaint in court or submitted evidence to a regulatory agency, those who have reported fraud know firsthand that the legal process can take a great deal of time. Whistleblowers often wait several years before ever seeing the proverbial fruits of their labor. So when it comes to the adjudication of whistleblower awards, is there such a thing as an unreasonable delay?
That’s what one anonymous SEC whistleblower is arguing in federal court. The John Doe petitioner, who has been waiting for over two years for a determination on his case, is asking the U.S. Court of Appeals for the District of Columbia Circuit to issue a writ of mandamus directing the SEC to “issue a preliminary determination regarding [his or her]’s whistleblower award claim within 60 days” and a final determination within six months. The petition argues, among other things, that such time constraints would not impede the SEC’s other enforcement actions, and that continued delays in investigations and reward determinations frustrate the goals of the SEC Whistleblower Program. (According to a Wall Street Journal investigation, two years is the average time it took the SEC to issue whistleblower award determinations from 2014 to 2017.)
The SEC has opposed this petition, arguing that it works “diligently and in good faith to process claims within a reasonable period” given its limited resources, and that cases involving multiple claimants and cross-agency investigations—such as John Doe’s claim—necessitate a longer timeline. The SEC also noted that ordering a swifter adjudication would impede its abilities to fully and soundly explore complex claims. That said, the SEC is still considering a rule that would, among other things, allow it to deny meritless submissions more quickly in order to focus on meritorious cases.
To learn more about filing an SEC whistleblower claim, click here.
- How to Be a Whistleblower
- SEC Enforcement Actions
- SEC Whistleblower Program
- Question of the Week — Should the SEC Cap Whistleblower Awards?