What is the SEC Whistleblower Program?

Q: What is the SEC Whistleblower Program?

SEC Whistleblower Program The SEC Whistleblower Program offers awards to eligible whistleblowers who provide original information that leads to successful SEC enforcement actions with total monetary sanctions exceeding $1 &hellip; <a href="https://www.zuckermanlaw.com/sp_faq/sec-whistleblower-program/">Continued</a>

SEC Whistleblower Program

The SEC Whistleblower Program offers awards to eligible whistleblowers who provide original information that leads to successful SEC enforcement actions with total monetary sanctions exceeding $1 million. A whistleblower may receive an award of between 10% and 30% of the total monetary sanctions collected in actions brought by the SEC and in related actions brought by other regulatory or law enforcement authorities. The SEC Whistleblower Program allows whistleblowers to submit tips anonymously if represented by an attorney in connection with their tip.

Our clients’ SEC whistleblower tips have helped the SEC halt more than $1 billion in fraudulent investment schemes.

Since the inception of the SEC Whistleblower Program, the SEC has paid more than $1.3 billion in awards to whistleblowers, including seven awards to our clients. The largest SEC whistleblower awards to date are $279 million, $114 million, $110 million, and $50 million. See a summary of the SEC whistleblower cases that have resulted in large awards.

Experienced and effective SEC whistleblower attorneys can provide critical guidance and effective advocacy to whistleblowers to increase the likelihood that they get the maximum award from the SEC Whistleblower Program.

We have obtained awards for eight SEC whistleblowers. The orders announcing those awards noted our clients’ significant assistance to SEC staff that led to SEC enforcement actions and enabled the SEC to conserve resources.

Contact us today to find out the strategies that we have successfully employed to secure SEC whistleblower awards for our whistleblower clients from the SEC Whistleblower Program.

Our firm’s SEC whistleblower attorneys have secured awards for whistleblowers disclosing a wide range of federal securities violations, including:

SEC Whistleblower Program’s Success

In 2010, Congress created the SEC Whistleblower Program 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).

In its short history, the SEC Whistleblower Program has enabled the SEC to uncover significant investment fraud schemes and halt ongoing fraud. Since 2011, the SEC Whistleblower Office has received over 62,000 tips. The SEC has paid more than $1.3 billion in awards to whistleblowers for providing information that led to successful enforcement actions. According to a recent report of the SEC Office of the Whistleblower, “[e]nforcement actions brought using information from meritorious whistleblowers have resulted in orders for more than $6.3 billion in total monetary sanctions, including more than $4.0 billion in disgorgement of ill-gotten gains and interest, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.”

See our article in Forbes, One Billion Reasons Why the SEC Whistleblower-Reward Program is Effective, which former SEC Commissioner Kara M. Stein cited in her Statement on Proposed Amendments to the Commission’s Whistleblower Program Rules.

Anonymous Reporting to SEC Whistleblower Program

Under the rules of the SEC Whistleblower Program, whistleblowers have the ability to report anonymously if represented by an attorney. A skilled whistleblower attorney will be able to skillfully guide a whistleblower through the process, maximizing the likelihood that their identity is not revealed. The SEC Whistleblower Program also offers substantial protection against retaliation.

For more information about the SEC Whistleblower Program, see our Whistleblower Page and download the eBook Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award. Click below to hear an SEC whistleblower lawyer’s tips for SEC whistleblowers:

Tier 1 Law Firm Successfully Representing Whistleblowers at SEC Whistleblower Program

If you have information about securities fraud or other violations, contact an experienced SEC whistleblower attorney at Zuckerman Law for a free, confidential consultation by calling us at 202-930-5901 or 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 at the SEC Whistleblower Program to maximize your likelihood of recovering and maximizing an SEC whistleblower award. We represent whistleblowers worldwide.

Recently the Association of Certified Fraud Examiners published a profile of Matt Stock’s success working with whistleblowers to fight fraud:

Click here to learn more about anti-retaliation protections for SEC whistleblowers under the Dodd-Frank Act and Sarbanes-Oxley Act.

Reasons to Reward Whistleblowing to the SEC and Benefits of the SEC Whistleblower Program

As discussed in rulemaking concerning the SEC whistleblower program, there are many tangible benefits to the program:

Encouraging potential whistleblowers to provide information on possible violations increases the effectiveness of the SEC’s enforcement activities. More effective enforcement leads to earlier detection of violations and increased deterrence of potential future violations, which should assist in a more efficient allocation of investment funds.
Serious securities frauds can cause inefficiencies in the economy by diverting investment funds from more legitimate, productive uses. If investors fear theft, fraud, manipulation, insider trading, or conflicted investment advice, their trust in the markets will be low, in both the primary market for issuance and the secondary market for trading. This would prompt investors to demand a higher risk premium for holding securities, increasing the cost of raising capital and impairing capital formation (relative to the case where rules against such abuses were in effect and properly enforced and obeyed). To the extent that the SEC whistleblower program increases deterrence of potential future violations, investors’ trust in the securities markets increases. This increased investor trust will promote lower capital costs as more investors enter the market, and as investors generally demand a lower risk premium due to a reduced likelihood of securities fraud.
By increasing the likelihood of detecting misconduct, the SEC whistleblower program reduces the unfair competitive advantages that some companies can achieve by engaging in undetected violations.

SEC Whistleblower Program’s Annual Reports to Congress

To learn more about the SEC Whistleblower Program’s results, see the SEC Office of the Whistleblower’s Annual Reports to Congress:

How to Report Information to the SEC Whistleblower Program and Qualify for an SEC Whistleblower Award

The SEC whistleblower process is lengthy and complex. See below for articles responding to frequently asked questions by SEC whistleblowers.

SEC Whistleblower Program Sets Records in 2021

In FY 2021, the SEC received more than 12,200 whistleblower tips—the largest number of whistleblower tips received in a fiscal year, which represents an approximate 76% increase over FY 2020.
From FY 2012 to FY 2021, the number of whistleblower tips submitted to the SEC has grown by approximately 300%. In light of recent large awards, the SEC will likely continue to attract a high volume of whistleblower tips.
Since the inception of the SEC Whistleblower Program, the SEC has received more than 52,400 whistleblower tips and awarded approximately $1.1 billion to 226 individuals.
During FY 2021, the SEC awarded approximately $564 million to 108 individuals —both the largest dollar amount and the largest number of individuals awarded in a single fiscal year. The two largest SEC whistleblower awards in the program’s history were paid in FY 2021 — a $114 million award to one whistleblower in October 2020 and a $110 million award to another in September 2021.
In FY 2021, the most common violations reported by whistleblowers were Manipulation (25%), Corporate Disclosures and Financials (16%), Offering Fraud (16%), Trading and Pricing (6%), and Initial Coin Offerings and Cryptocurrencies (6%).
The SEC continues to attract tips from whistleblowers worldwide. In FY 2021, SEC received tips from individuals in 99 foreign countries, as well as from every state in the United States and the District of Columbia. And approximately 20% of the whistleblowers that received awards in FY 2021 were based outside of the United States.
Of the whistleblowers who received awards in FY 2021, approximately 56% provided original information that caused staff to open an investigation or examination, and approximately 44% received awards because their original information significantly contributed to an already existing investigation or examination.
Approximately 60% of the award recipients in FY 2021 were current or former insiders of the entity about which they reported information of wrongdoing. Of those recipients, more than 75% raised their concerns internally to their supervisors, compliance personnel, or through internal reporting mechanisms, or understood that their supervisor or relevant compliance personnel knew of the violations, before reporting their information of wrongdoing to the SEC.
Whistleblowers who received awards in FY 2021 assisted the SEC in bringing enforcement cases involving an array of securities violations, including offering frauds, such as Ponzi schemes, false or misleading statements in a company’s offering memoranda or marketing materials, accounting violations, internal controls violations, and Foreign Corrupt Practices Act.

SEC Whistleblower Attorneys

We have substantial experience investigating securities fraud schemes and preparing effective submissions to the SEC concerning a wide range of federal securities violations, including:

Top-Rated SEC Whistleblower Lawyers

We have assembled a team of leading whistleblower lawyers to provide top-notch representation to SEC whistleblowers at the SEC Whistleblower Program. 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, Stock developed expertise in financial statement analysis and internal controls testing and fraud recognition. He uses his auditing experience to help IRS, CFTC and SEC whistleblowers investigate and disclose complex financial frauds to the government and develop a roadmap for the SEC to take an enforcement action. Matt has been interviewed on CNBC, quoted extensively about whistleblower rewards in the media, and is the lead author of SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.
Dallas Hammer has extensive experience representing whistleblowers in retaliation and rewards claims and has written extensively about cybersecurity whistleblowing. He was selected by his peers to be included in The Best Lawyers in America® in the category of employment law in 2021 and 2022.
Described by the National Law Journal as a “leading whistleblower attorney,” founding Principal Jason Zuckerman has established precedent under a wide range of whistleblower protection laws and obtained substantial compensation for his clients and recoveries for the government in whistleblower rewards and whistleblower retaliation cases. He 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 protection laws. Zuckerman also served as Senior Legal Advisor to the Special Counsel at the U.S. Office of Special Counsel, the federal agency charged with protecting whistleblowers in the federal government. At OSC, he oversaw investigations of whistleblower claims and obtained corrective action or relief for whistleblowers.
Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” (2020, 2018, 2017, 2015, 2009, and 2007), selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2021) and in SuperLawyers in the category of labor and employment law (2012 and 2015-2021), is rated 10 out of 10 by Avvo, based largely on client reviews, and is rated AV Preeminent® by Martindale-Hubbell based on peer reviews
We have published extensively on whistleblower rights and protections, and speak nationwide at seminars and continuing legal education conferences. We blog about new developments under whistleblower retaliation and rewards laws at the Whistleblower Protection Law and SEC Awards Blog, and in 2019, the National Law Review awarded Zuckerman its “Go-To Thought Leadership Award” for his analysis of developments in whistleblower law.
Our attorneys have been quoted by and published articles in leading business, accounting, and legal periodicals, including The Wall Street Journal, Forbes, CNBC, MarketWatch, Vox, Accounting Today, Going Concern, Law360 – Expert Analysis, Investopedia, The National Law Review, inSecurities, Government Accountability Project, S&P Global Market Intelligence, Risk & Compliance Magazine, The D&O Diary, The Compliance and Ethics Blog, Compliance Week and other printed and electronic media.