This article provides an overview of the SEC Whistleblower Program and identifies five ways in which SEC whistleblower law firms can significantly assist whistleblowers in combatting fraud and obtaining an SEC whistleblower award.
Since the inception of the SEC Whistleblower Program, the SEC has received more than 60,000 whistleblower tips and awarded approximately $1.8 billion. In FY 2023, the SEC received more than 18,000 whistleblower tips.
As less than half of one percent of SEC whistleblower tips result in the payment of a whistleblower award, having an experienced SEC whistleblower attorney prepare a thorough TCR whistleblower submission, protect your interests at the SEC, and prepare a detailed award application can significantly increase your chance of obtaining an award.
Our clients’ SEC whistleblower tips have helped the SEC halt more than $1 billion in fraudulent investment schemes and we have obtained awards for clients reporting a variety of securities law violations, including accounting fraud.
If you have original information about fraud or other violations of federal securities laws that may qualify for an SEC whistleblower award, contact the Director of our SEC whistleblower practice at mstock@zuckermanlaw.com or call our leading SEC whistleblower lawyers at (202) 930-5901 or (202) 262-8959. All inquiries are confidential.
In matters in which we obtained SEC whistleblower awards for our clients, the public orders announcing the awards note the “significant assistance” provided to SEC staff that enabled the SEC to complete SEC investigations more quickly.
Contact us today to find out the strategies that we have successfully employed to secure SEC whistleblower awards for our whistleblower clients.
Since 2012, the SEC Office of the Whistleblower has issued more than $1.8 billion in awards to whistleblowers. The largest SEC whistleblower awards to date are:
See some of the SEC whistleblower cases that have resulted in multi-million dollar awards.
The path to receiving an SEC whistleblower award is lengthy and complex. In fact, most successful SEC whistleblower claims take 4 years or more to complete. Throughout this process, experienced SEC whistleblower attorneys can provide critical guidance to whistleblowers on a wide range of issues. The five areas discussed below represent only a handful of the countless ways in which the best SEC whistleblower law firms can assist whistleblowers before the SEC.
Moreover, as an added layer of protection, SEC whistleblower law firms can carefully review all information and documents included in the submission and either: (i) identify with particularity any information or documents that could reasonably be expected to reveal the whistleblower’s identity if disclosed to a third-party (to put the SEC on notice of the sensitivity of the information); or (ii) redact/exclude this information from the submission. When redacting/excluding information from a submission to protect a whistleblower’s identity, whistleblower counsel can inform the SEC of potential witnesses that can corroborate the violations and can suggest that the SEC obtain particular evidence to prove the violation.
In short, SEC whistleblower law firms can take additional steps throughout the entire process to maximize the likelihood that a whistleblower’s identity is shielded. In certain circumstances, a whistleblower may remain anonymous, even to the SEC, until an award determination. However, even at the time of an award, a whistleblower’s identity is not disclosed to the public.
And if a whistleblower suffers retaliation, an SEC whistleblower attorney can help the whistleblower assess potential retaliation claims under federal and state law and develop and execute a strategy to enable their client to obtain the maximum recovery. The primary federal laws protecting SEC whistleblowers against retaliation are the anti-retaliation provisions of the Sarbanes-Oxley Act and the Dodd-Frank Act.
SEC whistleblower law firms can help whistleblowers determine whether they need to take any actions prior to submitting a tip to be eligible for an award. For example, one of the exceptions in the SEC Whistleblower Program’s rules, found in Section 21F-4 of the Securities Exchange Act, allows certain gatekeepers to be eligible for awards if they report their concerns internally to their supervisor (among others detailed in the rule), wait 120 days, and then submit their information to the SEC. If a whistleblower is uncertain about their eligibility to receive an award, they should consult with an experienced SEC whistleblower law firm. A thorough analysis informed by prior SEC whistleblower award determinations may be the difference between a multi-million dollar whistleblower award and no award at all.
First, SEC whistleblower law firms can investigate a fraud scheme, identify the key violations, and prepare a persuasive Form TCR submission that will be more likely to cause the SEC to open an investigation or expand an existing investigation. These submissions are reviewed by the SEC’s Office of Market Intelligence staff who determine whether a Form TCR warrants further investigation. An experienced SEC whistleblower law firm can provide the SEC with a clear roadmap for a successful enforcement action, which will often entail applying SEC precedent established in prior enforcement actions.
Next, SEC whistleblower law firms can identify the evidence that should be included in (or excluded from) submissions. Many whistleblowers are surprised to learn that they should not include all evidence of wrongdoing in a submission. Indeed, some evidence may hinder or delay the progress of an investigation. Moreover, SEC whistleblower law firms can address the countless evidentiary issues that may arise during a whistleblower claim, including, but not limited to:
Finally, as a practical matter, the SEC is more likely to act on a whistleblower’s information if they receive a compelling submission from an experienced SEC whistleblower law firm that has a track record of successfully representing SEC whistleblowers. As noted previously, the SEC receives thousands of tips annually and can only act on a fraction of the tips received. By signing a TCR submission, an SEC whistleblower attorney is signaling to the SEC that they have vetted the whistleblower’s information and concluded that it is sufficiently specific and credible to merit an investigation, and the investigation could result in a successful enforcement action resulting in monetary sanctions in excess of $1 million. Although there are unfortunately some firms that will file any whistleblower claim, experienced and effective SEC whistleblower lawyers are selective about the claims they bring and develop a reputation at the SEC for bringing meritorious claims.
For example, on December 6, 2019, Ericsson agreed to pay $539 million to settle the SEC’s charges of violating the U.S. Foreign Corrupt Practices Act (FCPA), as well as a $520 million penalty to the Department of Justice (DOJ), totaling more than $1 billion in monetary sanctions. If these two actions were based on original information voluntarily provided to the SEC and DOJ by an eligible whistleblower, the SEC could pay an award to that whistleblower of between 10 and 30 percent of the $1 billion.
SEC whistleblower law firms can assist whistleblowers by identifying these related actions and determining how best to report the information. Importantly, other agencies do not offer the same protections as the SEC Whistleblower Program. As such, it is imperative that whistleblowers understand how to report to specific agencies as well as the protections offered by each agency.
Prior to submitting a tip, SEC whistleblower law firms can help whistleblowers leverage these rules to maximize their recovery. An effective analysis and application of the award factors could potentially increase an award by millions of dollars. And during the course of an SEC investigation or SEC enforcement proceeding, an experienced SEC whistleblower law firm can identify opportunities to provide effective assistance to the SEC. In addition, experienced SEC whistleblower attorneys can help prepare a detailed application for an award that makes a compelling case for a high award percentage and can help the whistleblower navigate the award application process.
Blowing the whistle through the Dodd-Frank Act’s SEC Whistleblower Program is inherently a long process filled with some uncertainty. But with experienced counsel, a whistleblower can increase their chance of success, mitigate the risk of being “outed,” get sound advice about their options and the process, and combat any potential retaliation.
For more information about SEC Whistleblower Law Firms, see How do I choose the best whistleblower attorney?
Recently the Association of Certified Fraud Examiners published a profile of SEC whistleblower lawyer Matt Stock’s success fighting fraud:
For more information about the SEC Whistleblower Program, see 5 Tips for SEC Whistleblowers and Lessons Learned from SEC Whistleblower Awards.
Zuckerman Law has helped whistleblowers report a wide variety of fraudulent schemes, including:
See our article 5 Tips for SEC Whistleblowers to Get SEC Whistleblower Awards.
Click here to learn more about anti-retaliation protections for SEC whistleblowers under the Dodd-Frank Act and Sarbanes-Oxley Act.