A myriad of corporate scandals in the 2000s brought to light the market place could not be effectively monitored for fraudulent conduct without the help of individuals with knowledge of the illegal conduct—whistleblowers.
In 2010, Congress provided the tools to whistleblowers to report fraudulent conduct by passing the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank also provided whistleblowers protections from retaliation and rewards for their efforts.
Our experienced team of SEC whistleblower attorneys has the expertise and resources to build a strong case for those clients reporting violations of Securities Exchange Commission laws and regulations.
What is the SEC Whistleblower Program?
The Dodd-Frank Wall Street Reform allows for individuals who have the courage to come forward and provide inside information to the SEC to receive significant monetary awards, employment protections, and anonymous reporting.
Individuals can often identify fraud committed against private securities investors and help maintain a fair market. Securities fraud covers a broad range of activities, such as:
- Advanced Fee Schemes
- Broker Embezzlement
- Foreign Currency Fraud
- Hedge Fund-Related Fraud
- High Yield Investment Fraud
- Late Day Trading
- Ponzi Schemes
- Pyramid Schemes
The Securities Exchange Act provides financial awards between 10% and 30% of the total amount recovered to employees who provide original information to the SEC.
These incentives can result in multi-million dollar rewards. Eligible individuals qualify for an award by voluntarily providing original information to the SEC that results in a successful enforcement action collecting over $1 million in sanctions. One of the largest awards ever issued to a whistleblower under the SEC Whistleblower Program is $83 million.
Who Can Be an SEC Whistleblower?
Virtually anyone with evidence proving misconduct or fraud can be an SEC whistleblower.
An SEC whistleblower is anyone who reports violations of federal securities laws or regulations that have occurred, are on-going, or are about to occur. You can be a former or current employee of the company engaging in the wrongdoing, but it is not necessary.
You may be a corporate competitor or an individual who has done some independent market analysis. Or you may have learned of the wrongdoing through interactions with others in the field. However, to claim a reward as a whistleblower, the misconduct must be of a particular type, and disclosure must occur in a specific way.
Ultimately, those who believe they have original information, that is something not likely known to the SEC, should voluntarily disclose that information through the SEC Whistleblower Program.
Factors weighing in favor of SEC action:
- Significance of the information provided
- Interest of Law Enforcement
- The extent to which whistleblowers assist
How to File an SEC Whistleblower Lawsuit
A whistleblower must complete and submit SEC Form TCR either through the Commission’s online portal or by mail or fax. The information must be submitted under penalty of perjury. The whistleblower must disclose the violation to the SEC before a government authority requests information or within 120 days of reporting the violation internally.
In order to report the information anonymously, you must provide contact information for an attorney. Without representation by an SEC whistleblower attorney, you may not be eligible to collect an award.
Following the submission requirements is critical, approximately 38% of denials of awards to whistleblowers is due to their submission not complying with SEC program rules. Working with an experienced SEC attorney can help ensure the manner and form of submission are proper.
The SEC reviews all submissions. Complaints that appear to be serious and substantial are moved on for further review, possible designation as a Matter under Investigation, and additional prosecution by the SEC or related agencies. If a matter reaches a final judgment or order resulting in more than $1 million in monetary sanctions, the SEC posts a Notice of Covered Action. Following the posting, a whistleblower may seek a monetary award. Additional information may be found in the SEC’s Division of Enforcement Manual.
At Halunen Law we regularly monitor the Notice postings to ensure our clients can claim any reward they may be eligible for.
Contact Our SEC Whistleblower Lawyers Today
If you believe you have evidence of misconduct or fraud against the government, contact us today. We can set up a free consultation to discuss the details and provide an assessment of whether you have a strong case.