Difference between revisions of "SEC Whistleblower Program"

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Finally, to be eligible for an award, some whistleblowers must take certain actions (''e.g.,'' the 120-day exception for auditors under certain circumstances, see Tip #2) before reporting to the SEC. Whistleblowers should therefore understand and consider the specific eligibility requirements in determining when to report to the SEC.
Finally, to be eligible for an award, some whistleblowers must take certain actions (''e.g.,'' the 120-day exception for auditors under certain circumstances, see Tip #2) before reporting to the SEC. Whistleblowers should therefore understand and consider the specific eligibility requirements in determining when to report to the SEC.


=='''Tip #4: Know the Rules Before Filing with the SEC'''==
=='''Tip #4: Know the Rules ''Before'' Filing with the SEC'''==
Besides avoiding “unreasonable delay,” whistleblowers should be aware of other factors (see § 240.21F-6) that influence the size of awards. Whistleblowers must learn the rules early on because, as mentioned, some actions must be taken prior to filing with the SEC. For example, the whistleblower office may reduce the amount of an award if the whistleblower participated in the reported securities-law violation or interfered with the company’s internal compliance and reporting systems.
Besides avoiding “unreasonable delay,” whistleblowers should be aware of other factors (see § 240.21F-6) that influence the size of awards. Whistleblowers must learn the rules early on because, as mentioned, some actions must be taken prior to filing with the SEC. For example, the whistleblower office may '''''reduce''''' the amount of an award if the whistleblower participated in the reported securities-law violation or interfered with the company’s internal compliance and reporting systems.


On the other hand, the whistleblower office may increase the amount of an award based on:
On the other hand, the whistleblower office may '''''increase''''' the amount of an award based on:
*the tip’s significance to the success of any proceeding brought against wrongdoers;
*the assistance that you and your legal representative provide in the SEC action or related action;
*the SEC’s law-enforcement interest in deterring the specific violation; and
*whether, and the extent to which, you participated in your company’s internal compliance and reporting systems.
 
Accordingly, whistleblowers have an incentive to report internally to their companies’ compliance personnel before going to the SEC. If whistleblowers choose to report internally, then '''''they should also report the same information to the SEC within 120 days.''''' That way, in evaluating a potential award, the SEC will consider the date of the internal report, rather than the date that the whistleblower reported to the SEC. As the SEC puts it, the whistleblower office will “hold your place in line.” This may determine, for example, whether a whistleblower submitted “original information.”


the tip’s significance to the success of any proceeding brought against wrongdoers;
the assistance that you and your legal representative provide in the SEC action or related action;
the SEC’s law-enforcement interest in deterring the specific violation; and
whether, and the extent to which, you participated in your company’s internal compliance and reporting systems.
Accordingly, whistleblowers have an incentive to report internally to their companies’ compliance personnel before going to the SEC. If whistleblowers choose to report internally, then they should also report the same information to the SEC within 120 days. That way, in evaluating a potential award, the SEC will consider the date of the internal report, rather than the date that the whistleblower reported to the SEC. As the SEC puts it, the whistleblower office will “hold your place in line.” This may determine, for example, whether a whistleblower submitted “original information.”
=='''Tip #5: Draft a Tip that Grabs the SEC’s Attention'''==
=='''Tip #5: Draft a Tip that Grabs the SEC’s Attention'''==
The SEC Whistleblower Office is relatively small, and thousands of tips are submitted annually. According to the SEC’s Annual Report Congress on the Whistleblower Program, the office received 6,911 tips in fiscal year 2020. As such, SEC whistleblowers and their attorneys should tailor their tips to quickly grab the whistleblower office’s attention. While we could write a book on this section alone, here are a few “rules” to keep in mind when drafting submissions:
The SEC Whistleblower Office is relatively small, and thousands of tips are submitted annually. According to the SEC’s Annual Report Congress on the Whistleblower Program, the office received 6,911 tips in fiscal year 2020. As such, SEC whistleblowers and their attorneys should tailor their tips to quickly grab the whistleblower office’s attention. While we could write a book on this section alone, here are a few “rules” to keep in mind when drafting submissions: