Difference between revisions of "SEC Whistleblower Program"

SEC Whistleblower Program (view source)

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 In 2011, the SEC Office of the Whistleblower was created pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) to run the SEC Whistleblower Reward Program. The program offers monetary incentives to individuals who report information about violations of the federal securities laws to the SEC. '''[https://www.forbes.com/sites/realspin/2017/07/18/one-billion-reasons-why-the-sec-whistleblower-reward-program-is-effective/?sh=6b06bf9a3009#526977113009 In its short history, the SEC Whistleblower Reward Program has been extraordinarily successful in enabling the SEC root out securities fraud and protect investors.]''' To date, the SEC Office of the Whistleblower has issued more than $500 million in awards to whistleblowers.
+== SEC Whistleblower Rules ==
+Under the rules of the program, the SEC Office of the Whistleblower is required to issue awards to eligible whistleblowers who provide original information that leads to successful enforcement actions with total monetary sanctions in excess of $1 million. In exchange for the specific and credible tips, '''whistleblowers will receive an award of between 10% and 30% of the total monetary sanctions collected.''' The SEC considers positive and negative factors when determining an award percentage.
+The program allows individuals to submit information anonymously to the SEC Office of the Whistleblower if represented by an attorney. Whistleblowers are also afforded substantial protection against retaliation.
+Regardless of citizenship, under the [https://www.zuckermanlaw.com/sec-whistleblower-lawyers/ SEC Whistleblower Program], whistleblowers are eligible for monetary awards when they provide original information to the SEC about violations of federal securities laws.
+Since the inception of the whistleblower program, tips have come from whistleblowers in '''[https://www.sec.gov/files/sec-2018-annual-report-whistleblower-program.pdf 119 countries outside of the United States]'''. In 2018 alone, the SEC received tips from whistleblowers in 72 foreign countries. The SEC Whistleblower Office received the highest number of tips from whistleblowers in the: United Kingdom, Canada, and Australia.
+To date, the SEC Whistleblower Office has issued approximately [https://www.zuckermanlaw.com/sp_faq/largest-sec-whistleblower-awards/ $1 billion in awards to whistleblowers.] The [/https://www.zuckermanlaw.com/sp_faq/largest-sec-whistleblower-awards/ largest SEC whistleblower awards to date] are $50 million, $39 million, and $37 million. For more information about the SEC Whistleblower Program, see the eBook [https://www.zuckermanlaw.com/sec-whistleblower-lawyers/ Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.]
+==Criteria for Determining the Amount of a Whistleblower Award==
+Many factors affect the amount of a whistleblower award. The SEC may increase the amount of an award based on the following factors:
+#The significance of the tip to the success of any proceeding brought against wrongdoers. A tip’s significance depends on, for example:
+##the nature of the reported information, including whether the information’s reliability and completeness allowed the SEC to conserve resources; and
+##the degree to which the information supported one or more successful claims brought by the SEC or related actions brought by other regulatory or law-enforcement authorities.
+#The extent of the assistance that you and your legal representative provided in the SEC action or related action. Considerations include:
+##whether you provided ongoing, extensive, and timely cooperation and assistance (including when the whistleblower or their attorney provides industry-specific knowledge and expertise);
+##the timeliness of your initial report to the SEC or to your employer;
+##the resources conserved because of your assistance;
+##whether you appropriately encouraged or authorized others, who might otherwise not have participated in the investigation or related action, to assist SEC staff;
+##your efforts to remediate the harm caused by the violations; and
+##any unique hardships you experienced as a result of blowing the whistle.
+#The SEC’s law-enforcement interest in deterring the specific violation. Consider factors such as:
+##how much an award enhances the SEC’s ability to enforce the federal securities laws and protect investors;
+##the degree to which an award encourages the submission of high-quality information;
+##whether the specific violation is an SEC priority; and
+##the dangers of the specific violation to investors.
+#Whether, and the extent to which, you participated in your company’s internal compliance and reporting systems. Think about:
+##whether you reported internally before, or at the same time as, you reported to the SEC; and
+##whether you assisted any internal investigation concerning the violation.
+Conversely, the SEC may reduce the amount of an award based on these considerations:
+#If you participated in, or were culpable for, the securities-law violation(s) you reported. Consider the following:
+##your role in the violation;
+##your education, training, experience, and position of responsibility at the time the violation occurred;
+##whether you acted knowingly and intentionally;
+##whether you financially benefitted from the violation;
+##whether you committed a violation in the past;
+##the egregiousness of the underlying violation; and
+##whether you knowingly interfered with the SEC’s investigation of the violation.
+#If you unreasonably delayed reporting the violation(s) to the SEC. This determination is based on:
+##whether you failed to take reasonable steps to report or prevent the violation from occurring or continuing;
+##whether you were aware of the violation but reported to the SEC only after learning of an investigation into the misconduct; and
+##whether there was a legitimate reason for you to delay reporting the violation.
+#If you interfered with your company’s internal compliance and reporting systems. Consider whether you knowingly:
+##interfered with your company’s reporting systems to prevent or delay detection of the violation; or
+##made materially false statements, or provided false documents, to hinder your company’s ability to detect, investigate, or remediate the violation
+== Securities Law Violations that Qualify for an SEC Whistleblower Award ==
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Accounting_fraud Accounting fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Investment_fraud Investment fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Ponzi_schemes Ponzi schemes]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Foreign_bribery_and_FCPA_violations Foreign bribery and FCPA violations]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Cryptocurrency_fraud Cryptocurrency fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Promissory_note_fraud Promissory note fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/EB-5_investment_Fraud EB-5 investment Fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Fraudulent_Securities_Offerings Fraudulent Securities Offerings]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Improper_Revenue_Recognition Improper Revenue Recognition]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Inadequate_Internal_Controls Inadequate Internal Controls]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Deceptive_Non-GAAP_Financials Deceptive Non-GAAP Financials]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Manipulation_of_a_Security%E2%80%99s_Price_or_Volume Manipulation of a Security’s Price or Volume]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Insider_Trading Insider Trading]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Hedge_Fund_Fraud Hedge Fund Fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Unregistered_Broker-dealers Unregistered Broker-dealers]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Investment_Adviser_Fraud Investment Adviser Fraud]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Anti-money_laundering_violations Anti-money laundering violations]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/False_or_Misleading_Statements_About_a_Company_or_Investment False or Misleading Statements About a Company or Investment]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Violations_of_Auditor_Independence_Rules Violations of Auditor Independence Rules]
+* [https://whistleblower-rewards-and-protections-wiki.zuckermanlaw.com/index.php/Misleading_or_Incomplete_Cybersecurity_Disclosures Misleading or Incomplete Cybersecurity Disclosures]