Tips for SEC Whistleblowers to Qualify for a Whistleblower Award
Risk & Compliance magazine, which reports about international developments in corporate risk management and regulatory compliance, has published an article by SEC whistleblower lawyers Matt Stock and Jason Zuckerman titled Tips for Whistleblowers to Qualify for an SEC Whistleblower Award.
The article shares tips that Stock and Zuckerman use as their “SEC whistleblower rules” when working with whistleblowers to qualify for an award. Stock and Zuckerman developed these “rules” from their vast experience representing SEC whistleblowers worldwide, including whistleblowers disclosing:
- Accounting fraud;
- Investment and securities fraud;
- Insider trading;
- Foreign bribery and other FCPA violations;
- EB-5 investment fraud;
- Manipulation of a security’s price or volume;
- Fraudulent securities offerings and Ponzi schemes;
- Inadequate internal controls;
- Deceptive non-GAAP financial measures;
- Improper revenue recognition;
- Violations of auditor independence rules; and
- Misleading or incomplete cybersecurity disclosures.
The rules detailed in the article include:
- Identify specific, original information evidencing a material violation and provide a roadmap for a successful enforcement action.
- Frame the submission to highlight SEC enforcement priorities.
- Do not delay reporting fraud.
- Consider reporting anonymously to mitigate the risk of retaliation.
- Comply with the rules governing eligibility for a whistleblower award.
- Leverage the SEC whistleblower rules to maximize the award percentage.
In addition, the article provides guidelines for preparing effective TCR submissions to the SEC Office of the Whistleblower:
- First, provide the SEC with a clear roadmap for a successful enforcement action. Do not submit a pile of documents and expect the Whistleblower Office to figure it out. Instead, walk the SEC, step-by-step, through specific and credible examples of the violations.
- Second, provide reliable investigative leads, such as names of witnesses, the specific locations of key documents, etc.
- Third, demonstrate how the violation is “material.” For example, explain why knowing about a particular fraudulent transactions or scheme would be important to a reasonable investor in making an investment decision.
- Fourth, where feasible, provide the Whistleblower Office with documentation of the violation. The SEC is much more likely to act on a tip that is supported by strong evidence. But be careful not to provide information protected by attorney-client privilege (documents, including emails, that involve advice from inside or outside counsel). And the whistleblower should obtain evidence only through lawful means (for example, hacking to obtain evidence could potentially expose the whistleblower to criminal prosecution).
To learn more about the SEC Whistleblower Program, download Zuckerman Law’s eBook: SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award:
Whistleblowers outside the U.S. can be eligible for a SEC whistleblower award
Regardless of citizenship, whistleblowers who provide original information that leads to enforcement actions with total civil penalties of more than $1 million may be eligible for an award of between 10-30 percent of the total sanctions imposed.
The 2017 Annual Report of the SEC Office of the Whistleblower reveals that whistleblowers outside the US are actively participating in the SEC Whistleblower Program, including disclosures about violations of the Foreign Corrupt Practices Act (FCPA) and abuse of the EB-5 Immigrant Investor Program. During FY 2017, whistleblowers in 72 countries filed tips with the SEC.
Since the inception of the SEC Whistleblower Program, whistleblower tips have enabled the SEC to recover nearly $1 billion in monetary sanctions from wrongdoers and has issued more than $175 million in awards to whistleblowers. See our column in Forbes: One Billion Reasons Why The SEC Whistleblower-Reward Program Is Effective.
How Can a Whistleblower Qualify for a SEC Whistleblower Award?
Top-Rated SEC Whistleblower Lawyers
We have assembled a team of leading whistleblower lawyers to provide top-notch representation to SEC whistleblowers. Recently Washingtonian magazine named two of our attorneys top whistleblower lawyers. U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area
- Matt Stock is a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. As an auditor, Mr. Stock developed an expertise in financial statement analysis, internal controls testing and fraud recognition, and he uses his auditing experience to help whistleblowersinvestigate and disclose complex financial frauds to the government and obtain damages for retaliation. He is lead author of SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.
- Both Bachman and Zuckerman served in senior positions at the Office of Special Counsel, where they oversaw investigations of whistleblower retaliation claims and whistleblower disclosures, and enforced the Whistleblower Protection Act.
- Eric Bachman has substantial experience litigating precedent-setting employment cases. His wins include a $100 million settlement in a disparate impact Title VII class action and a $16 million class action settlement against a major grocery chain. Having served as Special Litigation Counsel in the Civil Rights Division of the Department of Justice and as lead or co-counsel in numerous jury trials, Bachman is ready to go the distance to obtain the relief that you deserve.
- Jason Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2017, 2015, 2009, and 2007 selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2017), and selected by his peers to be listed in SuperLawyers(2012 and 2015-2017) in the category of labor and employment law. is rated 10 out of 10 by Avvo, based largely on client reviews, and rated AV Preeminent® by Martindale-Hubbell based on peer reviews.
- Bachman and Zuckerman served on the Department of Labor’s Whistleblower Protection Advisory Committee, which makes recommendations to the Secretary of Labor to improve OSHA’s administration of federal whistleblower protections.
- The firm has published extensively on whistleblower rights and protections, and regularly speaks nationwide at seminars and continuing legal education conferences. We blog about new developments in whistleblower law at the Whistleblower Protection Blog.