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SEC Whistleblower Program: When is the best time to report fraud or misconduct to the SEC for an award?

 

Whistleblowers should report fraud or misconduct to the SEC as soon as possible. While some situations require a whistleblower to wait 120 days before providing information to the SEC, we advise our clients to report promptly and that advice has helped our clients obtain awards. There are a few reasons to report promptly:

First, to be eligible for an award, 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.

Next, even if a whistleblower is the first to report the information, the SEC considers the timeliness of information to be a significant factor when determining the size of an award.  In 2015, 20% of all awards were reduced because of an unreasonable reporting delay.  Reporting promptly increases the chance of obtaining the 30%maximum award percentage.

Finally, as a practical matter, the SEC is more likely to act on timely information. The SEC receives a significant number of tips and has limited resources. The best claims reveal fraud that the SEC can halt and whose impact the SEC can potentially minimize. The SEC will probably not act on tips about speculative fraud that occurred years ago.

If you have original information about a securities-law violation, consider retaining an experienced and effective SEC whistleblower law firm that can quickly: (1) assess the claim; (2) draft a compelling tip, complaint, or referral (“TCR”); and (3) persuade the SEC to investigate the violation. By acting promptly to prepare persuasive submissions to the SEC, we have obtained awards for several of our clients.

The SEC Whistleblower Program has issued more than $900 million in awards to whistleblowers since 2012, which includes a multi-million dollar award to one of our clients.  

If you are seeking representation in an SEC whistleblower award or retaliation case, click here or call us at (202) 930-5901 to schedule a free, confidential consultation with our experienced and effective SEC whistleblower lawyersU.S. News and Best Lawyers®  named Zuckerman Law a Tier-1 Law Firm.

Click below to hear SEC whistleblower lawyer Matt Stock’s tips for SEC whistleblowers:

SEC whistleblower lawyers

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:

SEC Whistleblower Program Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award

SEC Whistleblower Attorneys

How to Get an SEC Whistleblower Bounty

SEC Whistleblower Bounties

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It’s a tough decision to become a whistleblower. However, the SEC has provided many reasons that individuals should go to the SEC as quickly as possible. First, individuals must provide original information in order to be eligible for an award. If someone provides the information about the specific violation before you, you will no longer be eligible for an award. In addition, a lot of awards are reduced because of undue delay. In 2015, 20% of awards were reduced because whistleblowers waited too long before going to the SEC with the information. Finally and as a practical matter, the SEC is most likely to act on timely information.

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.

Matthew Stock is the Director of the Whistleblower Rewards Practice at Zuckerman Law. He represents whistleblowers around the world in SEC, CFTC and IRS whistleblower claims. He is also a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor.