The rules of the SEC Whistleblower Program require whistleblowers to follow certain procedures when submitting a tip to the SEC. A failure to comply with these rules could render a whistleblower ineligible for an award, even if they provided original information to the SEC that lead to a successful enforcement action. The SEC recently amended the rules of the program to permit whistleblowers who originally failed to comply with certain procedures to fix, or “perfect,” their SEC whistleblower tips and become eligible for awards. As detailed below, the new rules require whistleblowers to act quickly to perfect their tips – so do not delay.
Since the inception of the SEC Whistleblower Program, the SEC has awarded approximately $1.9 billion to 397 individuals. During FY 2023, the SEC awarded nearly $600 million—the highest annual total by dollar value in the Program’s history—to 68 individual whistleblowers.
On September 23, 2020, the SEC adopted amendments to the rules governing the SEC Whistleblower Program. Under the amended rules, a whistleblower who originally failed to comply with Rules 21F-9(a) and (b) can perfect their SEC whistleblower tip by submitting a properly executed TCR:
On February 25, 2021, the SEC issued awards totaling more than $1.7 million to two whistleblowers who originally failed to comply with the rules, but then perfected their SEC whistleblower tips within 30 days of learning about the procedural requirements.
According to the press release announcing the awards: “As these awards show, deserving whistleblowers may receive an award if they comply with the Form TCR filing requirements within 30 days of first obtaining actual or constructive notice of the filing requirement or 30 days from the date the whistleblower hires a lawyer to represent them in connection with the whistleblower’s previous submission of information to the Commission, whichever occurs first, and they otherwise meet the eligibility requirements.”
Whistleblowers should ensure that they complied with Rules 21F-9(a) and (b) in order to be eligible for an award. Whistleblowers should consult with an experienced SEC whistleblower attorney if they are uncertain about whether they followed the procedures correctly. Fixing any missteps could be the difference between a multimillion-dollar award, or no award at all.
The law firm’s SEC whistleblower attorneys will work to quickly provide SEC whistleblowers with the highest-quality representation. In conjunction with our courageous clients, we have helped the SEC halt multi-million dollar investment schemes, expose violations at large publicly traded companies, and return funds to defrauded investors.
In contrast to other SEC whistleblower law firms, our team includes a Certified Public Accountant and Certified Fraud Examiner with substantial experience auditing public companies and investigating complex fraud schemes. We understand the many challenges that the SEC faces in investigating our clients’ disclosures and take measures to increase the likelihood that the SEC will be able to effectively pursue the disclosures we provide on behalf of our clients. Recently, U.S. News and Best Lawyers® named Zuckerman Law a Tier-1 firm in the Washington DC metropolitan area.See the Associated of Certified Fraud Examiners’ recent profile of Matt Stock.
Click here to learn more about anti-retaliation protections for SEC whistleblowers under the Dodd-Frank Act and Sarbanes-Oxley Act.
