In this blog, we often discuss the financial bounties that whistleblowers receive from the US Securities & Exchange Commission (SEC) and occasionally, the Commodities Futures Trading Commission (CFTC.) What isn’t always discussed is the time and effort that it takes for a whistleblower to get to that point.
Recently the SEC issued a press release for National Whistleblower Appreciation Day (on July 30th), commending those who seek to bring fraudulent people and companies to justice. Whistleblowers who report information to the SEC generally involve securities law violations. (OSHA, the Occupational Safety & Health Administration, also has its own whistleblower program for safety and environmental breaches in the workplace.)
Becoming a whistleblower can encompass personal risk. The financial bounties are more than just an incentive. Offering monetary awards can also help individual whistleblowers through financial difficulties because of their assistance to the SEC.
Harassment and intimidation, demotions and other hostile workplace activity may also follow. A whistleblower could lose their job or have difficulty finding new employment because of their involvement in an enforcement action. Retaliation in one form or another is a possibility despite federal protections.
The SEC’s whistleblower program has awarded over $1.3 billion dollars to 278 individuals over the last ten years. Additionally, the SEC took in over $5 billion in monetary sanctions from enforcement actions during the ten-year time frame. In 2021 alone, the program paid out bounties of $564 million to 108 whistleblowers.
Started in 2012, the whistleblower program was intended to offer financial compensation to those who call attention to and report wrongdoing. Many want to right the wrongs committed by companies that have defrauded people in various ways.
The Whistleblower program originated with Sarbanes-Oxley Act of 2002 after the corporate downfalls of companies like Enron. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, passed after 2008 financial crisis, and expanded the program.
What Is a Whistleblower?
The Merriam-Webster dictionary defines a whistleblower as:
- One who reveals something covert or who informs against another
- Especially: an employee who brings wrongdoing by an employer or by other employees to the attention of a government or law enforcement agency
Many of the cases we write about are, in fact, employees, but not always. Dodd-Frank expanded the term “employees” to include employees from subsidiaries and affiliates. The statute of limitations for submitting information doubled, from 90 days to 180 days. Confidentiality is given, including the absence of any identifying information for whistleblowers in orders, press releases, and other outlets.
Employees frequently decide to report the wrongdoing internally first. But to engage and become eligible for protection against retaliation under Dodd-Frank, an individual must also report that activity to the SEC. Unfortunately, some companies (or individual employees) may ignore the protections afforded to whistleblowers and retaliate anyway.
If you have witnessed wrongdoing or activity you believe might be illegal, speak with an experienced whistleblower attorney as soon as possible, and preferably prior to reporting to the SEC. Knowing your rights and responsibilities before reporting can help you avoid some of the pitfalls that may come with being a whistleblower.
Retaining Experienced SEC Whistleblower Attorneys
Whistleblowers help everyone by notifying authorities of conduct that harms the public, while also earning financial compensation for themselves. Hiring experienced SEC counsel will greatly increase your chances of the SEC initiating an investigation based on your information. If you wish to remain anonymous, you must be represented by an attorney, who will submit everything on your behalf.
Silver Law Group and the Law Firm of David R. Chase jointly have experienced SEC whistleblower lawyers, including a former SEC Enforcement attorney on the team, so you will always have guidance throughout the process. Our SEC whistleblower attorneys can help you if you have information regarding securities or investment fraud, violations of federal securities laws, false filings, market manipulation, or other misconduct. You must provide timely, credible, and original information or analysis in order to be eligible.
Contact us through our online form or at (800) 975-4345 for a consultation. Our attorneys work on a contingency fee basis. This means that it costs you nothing to hire us, and we collect our fees when you receive an SEC bounty. Because we get paid when you do, we have the incentive to help you collect the maximum award available.