Success of the SEC Whistleblower Program
In a recent podcast episode titled Inside the World of Whistleblowers, inSecurities interviewed SEC whistleblower lawyer Matt Stock, Director of the Whistleblower Rewards Practice at Zuckerman Law. The episode discusses the success of the SEC Whistleblower Program, which was created in 2010 under the Dodd-Frank Act to “motivate those with inside knowledge to come forward and assist the Government to identify and prosecute persons who have violated securities laws and recover money for victims of financial fraud,” S. Rep. No. 111-176, at 110 (2010). Since the inception of the program, the SEC has paid more than $400 million in awards to whistleblowers. The SEC actions associated with those awards have resulted in sanctions orders totaling more than $2 billion.
In the episode, Stock discusses:
- How SEC whistleblower lawyers assess and work up claims for whistleblowers;
- What makes a successful whistleblower;
- Who is an eligible whistleblower for an award under the SEC Whistleblower Program;
- How whistleblowers can submit tips anonymously to the SEC;
- The process of an SEC whistleblower claim;
- How SEC whistleblower lawyers can protect whistleblowers throughout the process;
- How whistleblowers can maximize their future awards;
- The success of the SEC Whistleblower Program to date; and
- Legislation and rulemaking that may impact the program going forward.
SEC Whistleblower Program
Under the SEC Whistleblower Program, the SEC is required to issue awards to eligible whistleblowers who voluntarily provide original information that leads to successful enforcement actions with total monetary sanctions in excess of $1 million. Whistleblower awards range from 10 percent to 30 percent of the total monetary sanction collected. The largest SEC whistleblower awards to date are $50 million, $39 million and $37 million. See some of the SEC whistleblower cases that have resulted in multi-million dollar awards here.
Whistleblowers can be eligible for an award for reporting any violation of the federal securities laws that leads to a successful enforcement action in excess of $1 million. Some of the most common tips include:
- 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;
- Unregistered broker-dealers;
- Investment adviser fraud;
- Anti-money laundering (AML) violations;
- False or misleading statements about a company or investment;
- Inadequate internal controls;
- Deceptive non-GAAP financials;
- Improper revenue recognition;
- Violations of auditor independence rules;
- Misleading or incomplete cybersecurity disclosures; and
- Blockchain and cryptocurrency fraud.
For more information about the SEC Whistleblower Program, download the eBook Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.
SEC Whistleblower Lawyers
If you would like more information on reporting a violation of the federal securities laws, contact an SEC Whistleblower Attorney at Zuckerman Law for a free, confidential consultation. Zuckerman Law is one of the nation’s leading law firms representing whistleblowers in whistleblower rewards and retaliation cases.
Matt Stock leads the whistleblower rewards practice at Zuckerman Law. He is an attorney, Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. Mr. Stock leverages his experience as an attorney, CPA, CFE and external auditor to assist whistleblowers investigate and disclose complex financial frauds to the government. His practice focuses on representing whistleblowers in rewards cases at the SEC, CFTC, DOJ and IRS.
SEC Whistleblower Law Firm
How to Qualify for an SEC Whistleblower Bounty
- See our column in Forbes: One Billion Reasons Why The SEC Whistleblower-Reward Program Is Effective.
- See our column in Going Concern: Sarbanes-Oxley 15 Years Later: Accountants Need to Speak Up Now More Than Ever.
- See our post in Accounting Today: Whistleblower Protections and Incentives for Auditors and Accountants.
- See our post in The Compliance and Ethics Blog: Shkreli Trial Reveals the Challenges Faced by Compliance Whistleblowers.
Are Whistleblowers Protected from Retaliation?
Click here to learn more about anti-retaliation protections for SEC whistleblowers under the Dodd-Frank Act and Sarbanes-Oxley Act.