SEC Whistleblower Program




SEC Whistleblower Program

 

Advocacy for SEC Whistleblowers

Attorney Paul D. Scott was consulted on numerous occasions by various government officials (including SEC commissioners and U.S. Senate staff) in connection with the passage of Dodd-Frank and the SEC’s rules implementing the new program. With over 20 years of success working on whistleblower cases, both inside and outside of the Government, Mr. Scott has the experience and credibility to advocate effectively for whistleblowers.   The firm now has multiple confidential claims pending on behalf of clients before the SEC.

 

New SEC Whistleblower Rewards Program

The Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the Securities and Exchange Commission to pay rewards to certain individuals who provide the SEC with information leading to a successful enforcement action. If the SEC (or related authorities) recover at least $1,000,000 in penalties from the violators, then the whistleblowers who provided the information can receive a reward from the government of up to 30% of the penalties collected.
The rules implementing the new SEC Whistleblower Program are effective on August 12, 2011, but reports of misconduct from recent years may still potentially qualify. As long as the misconduct is recent enough that the SEC can still prosecute it, qualifying whistleblowers may still potentially be eligible for an award.

New Confidentiality Protections

Under the new SEC program, whistleblowers are permitted to submit their claims anonymously. In order to do so, however, they must be represented by counsel and follow the appropriate procedures set forth by the SEC. If a whistleblower qualifies for a reward, their identity must be disclosed to collect the reward, but otherwise, their identities can remain confidential.

Eligibility

The SEC has promulgated a detailed set of guidelines regarding who can qualify for an SEC reward. Click here for an informal summary of the key eligibility provisions from the Final Rule adopted by the SEC to implement the new Whistleblower Program.

Typical Violations of the Securities Laws

The securities laws cover a very broad range of financial activity, including, but not limited to, the following: Bribery or improper payments to foreign officials, fraudulent investment schemes (e.g., Ponzi scheme), insider trading, unregistered securities offerings, manipulation of securities, and corporate disclosure deficiencies, such as financial fraud or failure to file. To determine whether the conduct about which you have knowledge is a qualifying violation, you may contact us for a confidential consultation.

Old Insider Trading Bounty Program

Previously, the SEC was allowed to reward only whistleblowers who came forward with information about insider trading cases, and even then the rewards were limited to 10 percent or less of the penalties collected by the SEC. The new SEC Whistleblower Rewards Program has replaced the old bounty system; it covers tips about insider trading and about all other violations of the securities laws.