SEC Whistleblower Attorney
Under the SEC Whistleblower Program, whistleblowers are eligible for monetary awards when they provide original information that leads to successful SEC enforcement actions, or related successful actions, resulting in monetary sanctions over $1,000,000. A whistleblower may receive an award of between 10 to 30 percent of the monetary sanctions collected. Since the program’s inception, the SEC has paid more than $158 million in awards to whistleblowers.
Whistleblowers may submit tips anonymously through an attorney. For many whistleblowers, it is imperative that their identity remain confidential when submitting information to the SEC. An experienced SEC whistleblower attorney can skillfully guide whistleblowers through the process, maximizing the likelihood that their identity is not revealed to unauthorized parties.
In addition, an experienced SEC whistleblower attorney can maximize the likelihood of recovering an SEC whistleblower award. Under the program, the SEC is authorized to pay awards for original information about any violation of the federal securities laws, including:
- 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;
- Hedge fund fraud;
- Unregistered securities offerings;
- Investment adviser fraud;
- Broker-dealer anti-money laundering program violations;
- False or misleading statements about a company or investment;
- Inadequate internal controls;
- Deceptive non-GAAP financial measures;
- Improper revenue recognition;
- Violations of auditor independence rules;
- Misleading or incomplete cybersecurity disclosures; and
- Blockchain fraud.
If you have information you would like to report to the SEC, contact an experienced SEC whistleblower attorney at Zuckerman Law for a free, confidential consultation by calling 202-262-8959.
Zuckerman Law, one of the nation’s leading law firms representing whistleblowers in whistleblower rewards and whistleblower retaliation claims, will work to quickly provide you with the highest-quality representation to maximize your likelihood of recovering an SEC whistleblower award. See our recent article in Forbes: One Billion Reasons Why The SEC Whistleblower-Reward Program Is Effective.
SEC Whistleblower Program
Under the SEC Whistleblower Program, the SEC is required to pay awards, subject to certain limitations and conditions, to: (i) eligible whistleblowers who voluntarily provide the SEC with (ii) original information that (iii) leads to successful SEC enforcement actions, or related actions, resulting in monetary sanctions over $1,000,000.
First, most individuals, regardless of citizenship, may be “eligible” whistleblowers if they voluntarily submit a tip to the SEC about a violation that has occurred, is ongoing, or is about to occur. Indeed, even lawyers, external auditors, and individuals involved in the wrongdoing may be eligible for awards if certain steps are taken. If you are uncertain about your eligibility, you should consult with an experienced SEC whistleblower attorney to determine the appropriate steps.
Next, a whistleblower must provide the SEC with “original information”—i.e., information not already known to the SEC. If someone reports another individual’s information to the SEC first, the latter will not be entitled to a percentage of any monetary sanctions collected.
Finally, original information “leads to” a successful SEC enforcement action, or related action, if it causes the SEC or other designated authorities to open an investigation, re-open a previously closed investigation, pursue a new line of inquiry, or if the information “significantly contributes” to an open investigation. A whistleblower’s information may “significantly contribute” to an open investigation in several ways, including if the information allows the SEC to bring the enforcement action in significantly less time or with significantly less resources, expands the scope of the current investigation, leading to additional successful claims, or allows the SEC to bring claims against additional parties.
Protection for SEC Whistleblowers
SEC whistleblowers are also offered anti-retaliation protections. Specifically, an employer may not “discharge, demote, suspend, threaten, harass, directly or indirectly, or in any manner discriminates against, a whistleblower” for legally reporting a violation of the federal securities laws to the SEC. Relief or damages for retaliation includes reinstatement, double backpay, and litigation costs and reasonable attorneys’ fees. SEC whistleblower are also afforded protections under the Sarbanes-Oxley Act (SOX). A SOX whistleblower recently received a jury verdict of $11 million after prevailing on his SOX retaliation claim.
SEC Whistleblower Awards
The SEC can pay awards ranging from 10 to 30 percent of the “monetary sanctions” collected. Monetary sanctions include any money, such as penalties, disgorgement, and interest, ordered to be paid and any money deposited into a disgorgement fund or other fund pursuant to federal law.
Since 2011, the SEC Whistleblower Office has issued more than $154 million in awards to whistleblowers. In FY 2016 alone, the office issued over $57 million in awards to whistleblowers, including six of the ten largest whistleblower awards in the program’s history. The largest award to date is more than $30 million.
The table below identifies some of the largest awards that the SEC has issued to whistleblowers:
|Whistleblower Award||Date||Basis for Whistleblower Award|
|$30 million||September 22, 2014||A foreign whistleblower came to the SEC with “information about an ongoing fraud that would have been very difficult to detect.”
This award underscores that non-US citizens are eligible whistleblowers in the SEC Whistleblower Program.
|$22 million||August 30, 2016||A former financial executive at Monsanto exposed weaknesses in the company’s internal controls that failed to account for millions of dollars in rebates. Monsanto agreed to settle the allegations of accounting fraud for $80 million.
Importantly, external auditors, internal auditors, accountants and other compliance personnel may be eligible for awards under the SEC Whistleblower Program. Indeed, they are often best positioned to discover wrongdoing.
|$20 million||November 14, 2016||According to the SEC's order determining the whistleblower awards, three whistleblowers applied for awards related to the enforcement action. The SEC denied two of the whistleblowers' applications because they did not provide "original information," and issued the full $20 million award to one whistleblower.|
|$17 million||June 9, 2016||A company insider “substantially advanced the agency’s investigation and ultimate enforcement action.”
This award highlights that whistleblowers may receive an award if they provide original information regarding an open SEC investigation if it significantly contributes to the success of the action.
|$14 million||September 30, 2013||The whistleblower exposed a fraudulent offering that targeted foreign investors who sought to gain a legal pathway to citizenship through the EB-5 Immigrant Investor Program.
Recently, there has been rise in EB-5 investment fraud. Click here to read more about how to report EB-5 fraud and earn an award.
|$7 million||January 23, 2017||Three whistleblowers split an award of more than $7 million after helping the SEC prosecute an investment scheme.
One whistleblower provided information that was the primary reason that the SEC opened an investigation. That whistleblower received a more than $4 million award. Two other whistleblowers jointly provided new information during the SEC’s investigation that significantly contributed to the success of the SEC’s enforcement action. Those two whistleblowers will split more than $3 million.
|$5.5 million||January 6, 2017||An anonymous whistleblower orally provided the SEC with critical information about ongoing securities fraud. Generally, the SEC requires that whistleblower provide information “in writing.” However, the SEC waived that requirement in this case due to “highly unusual circumstances” and awarded the whistleblower more than $5.5 million for the information.
This award marks the third time that the SEC has deemed it appropriate to waive a procedural requirement. The most recent exception occurred on July 27, 2017, when the SEC issued a $1.7 million whistleblower award to an insider who failed to comply with all of the whistleblower program's rules and had some culpability in the fraud. The former chief of the SEC whistleblower office said that these awards underscore the SEC’s discretionary authority to do what justice requires.
|$5 million||May 17,2016||A former company insider’s detailed tip led the agency to uncover securities violations that would have been nearly impossible for it to detect but for the whistleblower’s information. The SEC's press release noted that employees are often best positioned to witness wrongdoing.
|$4 million||April 25, 2017||The SEC issued the $4 million award to an anonymous whistleblower who provided information that led another governmental authority (not the SEC) to a successful enforcement action resulting in significant monetary sanctions.
This award highlights that SEC whistleblowers are still eligible for an award when they provide information to the SEC that leads other governmental authorities to successful enforcement actions resulting in monetary proceeds in excess of $1 million.
|$4 million||September 30, 2016||The SEC issued the award to an anonymous whistleblower for “alter[ing] the agency to a fraud.”
The lack of publicly available information about the anonymous whistleblower and the enforcement action underscores how serious the SEC is about protecting whistleblower's. Under the program, whistleblower may report anonymously through an SEC whistleblower attorney.
|$3.5 million||May 13, 2016||The whistleblower “bolstered an ongoing investigation with additional evidence of wrongdoing” which helped the SEC during settlement discussions with the company.
This award underscores how whistleblowers may still receive an award even if the SEC already has an open investigation into a matter.
|$3.5 million||December 5, 2016||A whistleblower received an award of $3.5 million for providing original information to the SEC that led to a successful enforcement action. The press release states: "Whistleblowers do a tremendous service to the investing public and we will continue to reward those who come forward with valuable tips that help us bring successful cases against those who violate the securities laws."|
SEC Whistleblower Tips
Since 2011, the SEC Whistleblower Office has received over 18,000 tips. According to the SEC Whistleblower Program’s 2016 Annual Report to Congress, the number of whistleblower tips has increased each year since the inception of the program:
- FY2011: 334
- FY2012: 3,001
- FY2013: 3,238
- FY2014: 3,620
- FY2015: 3,923
- FY2016: 4,218
Due to the increased quantity of tips, it is imperative that whistleblowers prepare high-quality submissions that grab the SEC’s attention. Otherwise, whistleblowers run the risk of having their tip fall to the wayside like most of the 18,000 tips.
An experienced SEC whistleblower attorney can help whistleblowers get noticed by drafting a Form TCR that will grab the SEC’s attention and highlight the most important aspects of the claim. A well-prepared submission will also increase the likelihood that the SEC will act on the tip. Further, an experienced attorney will draft a TCR with an eye to the future and include significant factors that could increase the percentage of a potential award.
In addition to preparing the TCR, an SEC whistleblower attorney can determine the appropriate evidence to provide (or not provide) to the SEC as well as advise the whistleblower on any potential exposure as a result of providing the evidence. Finally, and as a practical matter, the SEC will likely view a whistleblower’s tip as more credible if it is submitted by a reputable SEC whistleblower attorney who has prior experience working with the SEC Whistleblower Office.
SEC Whistleblower Attorney: Top FAQs
- What is the SEC Whistleblower Program?
- What violations qualify for an SEC whistleblower award?
- How can I submit a tip to the SEC?
- Why should I choose the Zuckerman Law to represent me in my SEC whistleblower claim?
- Can I submit an anonymous tip to the SEC Whistleblower Office?
- When is the best time to report the fraud or misconduct to the SEC?
- Can I submit an SEC Whistleblower claim if the SEC already has an open investigation into the matter?
- Who is an “eligible” SEC whistleblower?
- Can compliance personnel, auditors, officers or directors qualify for an SEC whistleblower award?
- What is “original information”?
- How might my information “lead to” a successful SEC enforcement action?
- Can I submit a claim if I had involvement in the fraud or misconduct?
- Do I have to report a securities law violation to my company before reporting the violation to the SEC?
- Can I submit a tip if I agreed to a confidentiality provision in an employment/severance agreement?
- What factors does the SEC consider when determining the amount of the award?
- What employment protections are available for SEC whistleblowers?
- What type of evidence should I provide to the SEC?
- Can I disclose secret recordings to the SEC?
- What happens after I submit a tip to the SEC?
- How long does it take to receive an SEC whistleblower award?
- What happens after I apply for an SEC whistleblower award?
- What are the largest SEC whistleblower awards?