One of the most frightening things you may face is witnessing your employer doing something illegal. Perhaps you want to report the issue to the Securities and Exchange Commission (SEC), but you’re unsure where to turn for protection and advice.
Fortunately, King & Siegel LLP is here to help you. Our SEC whistleblower attorneys have represented many employees in Southern California through the process of reporting illegal activity in their companies. We advise clients on their rights during the reporting process and fight to ensure they get the full benefit of the whistleblower protections under the law.
What Is an SEC Whistleblower?
An SEC whistleblower is a person who reports possible violations of federal securities laws to the SEC. This can include reporting insider trading, accounting fraud, and other types of financial misconduct. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the SEC Whistleblower Rewards Program to protect whistleblowers from retaliation and provide a financial incentive for employees to report wrongdoing.
It’s often challenging to understand whistleblower protections. Our SEC whistleblower lawyers are standing by to help you navigate this process.
SEC Whistleblower Reward Program
The SEC Whistleblower Reward Program incentivizes people to report possible violations of securities laws to the Securities and Exchange Commission (SEC). The SEC may award the whistleblower an amount equal to 10-30% of the sanctions it collects due to the whistleblower’s information. The SEC must recover sanctions of at least $1 million for a whistleblower to be eligible for an award.
The SEC Whistleblower Reward Program allows whistleblowers to report tips anonymously. The SEC will assign a unique tip number to each whistleblower. The SEC can communicate with them without revealing their identity.
Despite anonymity protections, sometimes employers discover whistleblowers. Luckily, the program also has strong anti-retaliation protections to protect whistleblowers from any adverse action their employers may take due to their report.
Federal Violations Covered by the SEC Whistleblower Reward Program
The SEC Whistleblower Reward Program covers a wide range of federal violations, such as:
- Insider trading,
- Ponzi schemes,
- Accounting fraud,
- Foreign Corrupt Practices Act (FCPA) violations,
- Market manipulation,
- Investment adviser fraud,
- Cybersecurity violations,
- Municipal securities and public pension fraud, and
- Misleading marketing materials.
This list is not exhaustive. One of the SEC whistleblower lawyers at King & Siegel LLP can advise you on whether your concerns fall within the scope of this program.
How to Submit an Anonymous Tip to the SEC
Whistleblowers can submit tips anonymously by contacting the SEC Whistleblower Office. The SEC encourages whistleblowers to submit their tips online using the SEC’s tips, complaints, and referrals (TCR) form. Otherwise, you can call the SEC’s toll-free hotline at 800-732-0330 or submit your tip by mail or fax. A lawyer can help you navigate this process.
You must provide as much detailed information as possible about the potential violation. The SEC TCR form requests in-depth information about the company, the individuals involved, and any relevant documents or evidence. Keep records of your tip, including a copy of the TCR form and the date and time you submitted it.
You should speak with one of our SEC whistleblower lawyers before you submit a tip to ensure that you receive the protection of the SEC’s anonymity and anti-retaliation measures.
Get the SEC’s Attention
Once you submit a tip, there’s no guarantee that the SEC will act on it quickly. Whistleblowers can increase the chances that the SEC will act on the information submitted in the following ways:
- Provide detailed and specific information;
- Submit your tip as soon as possible, so the information isn’t stale;
- Provide evidence to support your tip, such as documents or financial records;
- Cooperate and quickly provide any additional information that they request; and
- Follow up on the tip if you don’t hear anything.
One of the best ways to increase the chance that the SEC will act on your tip is to seek legal guidance. One of the SEC whistleblower lawyers at our office can help you formulate your complaint and navigate the SEC process.
SEC Reward Eligibility
Only some whistleblowers receive an award from the SEC Whistleblower Rewards Program. The SEC decides whether to award a reward on a case-by-case basis.
To be eligible for an award, an individual must voluntarily provide original information to the SEC that leads to a successful enforcement action resulting in financial sanctions of over $1 million. The individual also cannot be a government official who received the information through their official duties.
The individual must participate in the SEC’s investigation and provide assistance where necessary to be eligible for an award. The SEC also considers retaliation when determining award eligibility.
Whistleblowers convicted of a crime related to the underlying securities law violation are not eligible. Nor will you receive an award if you make false statements to the SEC.
SEC Whistleblower Protection Against Retaliation
The SEC whistleblower protection against retaliation is critical to the SEC Whistleblower Rewards Program. The anti-retaliation provisions protect whistleblowers from discrimination, harassment, or retaliation by their employer for reporting possible securities law violations to the SEC.
The SEC investigates all retaliation complaints and takes enforcement action against employers who retaliate. Additionally, whistleblowers who have been retaliated against have the right to sue their employer in federal court for damages, including lost wages and benefits, attorney fees, and other litigation costs. If you believe your employer retaliated against you, contact our office today.
Examples of SEC Awards
The SEC has awarded several significant awards to whistleblowers. Here are a few examples:
- $50 million in 2018;
- $39 million in 2014;
- $50 million in 2020; and
- $37 million in 2022.
For more information on an assessment of your potential award for reporting a tip, contact King & Siegel LLP today.
The Benefits of Hiring One of Our SEC Whistleblower Attorneys
SEC whistleblowers benefit from working with an SEC whistleblower attorney, like those at King & Siegel LLP. Our attorneys help you navigate the complex legal process of the SEC’s whistleblower program and increase the chances of a successful outcome.
Our highly experienced employment litigation attorneys have fought on clients’ behalf against large and small employers. We understand that your livelihood is vital. Thus, we work to shield our clients in times of stress and discord. We’re skilled at bringing civil cases for workers who’ve suffered retaliation to recover compensation. Contact our office today.
Who Can Be an SEC Whistleblower?
Anyone can be an SEC whistleblower, regardless of their occupation or profession. The SEC Whistleblower Rewards Program is open to current and former employees, officers, directors, individuals who work in the securities industry, accountants, auditors, lawyers, and others.
Will I Receive an Award If I Only Report Wrongdoing Internally?
Generally, you must report your tip to the SEC to be eligible for an award. You should consult with a lawyer for more information.
Does a Whistleblower Need an Attorney?
A whistleblower does not need an attorney to report a tip to the SEC. However, an attorney can help a whistleblower navigate the process, protect anonymity, and advise on the type of information most likely to lead to SEC enforcement action. They can also help you claim a reward.