What is Involved using the SEC Whistleblower Program

The SEC Whistleblower Program is a federal program established in 2010 as a result of the financial crises of 2008. This program was folded into the wider Dodd-Frank legislation passed by Congress, and gives whistleblowers a path to take when they have concerns or tips regarding violations to federal securities laws. The spirit of this law was to provide tipsters a forum to report concerns while remaining anonymous (if desired) and have no fear of retaliation. Under this program, the reporting party does not have to be an employee of the organization which is being named. The tipster can be just about any concerned party that has information and details that the SEC can then review and determine validity.

To help assist the Whistleblower in compiling the proper paperwork as well as having a vehicle to report anonymously, a SEC Whistleblower lawyer is required to be part of the process. Together with their attorney, the Whistleblower will complete the required forms, exhibits and submission details on line and forward it to the SEC through their website. The attorney is then the main point of contact for the case and will act, if needed, as a go between with the SEC and the reporting party. This layer of protection works well in allowing the tipster to stay anonymous, give all pertinent data without fear of retaliation and provides the tipster some expert advice throughout the process.

Tips go through a substantial vetting process at the SEC. The first step is a cursory review of the submission and the accompanying detail. Once this review is complete and it is believed that the complaint has merit, the case is forwarded to investigators to do a deep review of the case. This review can literally take years. If, at the end of the investigation, it is deemed that an enforcement action is appropriate (the organization is found to have broken federal securities laws), the reporting party will then have the opportunity to file for a reward. The SEC will then gauge the tip, the value of the tip, whether or not it was a “new” complaint as well as other factors to determine if a reward should be granted or not and why.

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