The SEC Whistleblower Program offers significant financial rewards to individuals who provide original information about securities law violations. Whistleblowers can receive between 10% and 30% of the total monetary sanctions collected by the SEC Whistleblower attorney in a successful enforcement action. With some rewards reaching tens of millions of dollars, having an experienced SEC whistleblower attorney by your side can make a substantial difference in the size of your payout.

This article explores how whistleblowers can qualify for financial rewards and the crucial role an attorney plays in maximizing those rewards.

Overview of the SEC Whistleblower Program

The SEC Whistleblower Program was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It allows individuals to report violations of securities laws, such as insider trading, market manipulation, and accounting fraud. Whistleblowers who provide original, credible information that leads to successful enforcement action by the SEC are eligible for financial rewards.

The amount of the reward is based on the monetary sanctions collected, and it can range from 10% to 30%. The larger the sanctions imposed on the violating party, the bigger the whistleblower’s payout.

What Determines the Amount of the Reward?

The SEC considers several factors when determining the exact percentage of the whistleblower’s reward. These factors include:

1. Significance of the Information: The more valuable and detailed the information provided, the higher the potential reward.
2. Assistance to the SEC: Whistleblowers who assist the SEC throughout the investigation process are more likely to receive a larger reward.
3. Impact on the Public Interest: If the whistleblower’s information helps protect investors or prevent further harm to the market, the reward could be higher.
4. Timeliness of the Report: Information that is submitted early and before other whistleblowers file similar reports can positively impact the size of the reward.

An attorney who specializes in SEC whistleblower cases can help whistleblowers present their information in the most compelling way, emphasizing these factors to maximize the reward.

The Role of an Attorney in Maximizing Your Reward

While the SEC Whistleblower Program is designed to incentivize individuals to report wrongdoing, navigating the process can be challenging without expert legal representation. Here’s how an experienced attorney can help maximize your payout:

1. Drafting a Strong Submission

Submitting a whistleblower tip to the SEC requires careful attention to detail. The information must be well-organized, thoroughly documented, and specific to the violation being reported. Attorneys with experience in securities law know how to prepare submissions that meet the SEC’s stringent criteria.

By working with a lawyer, whistleblowers can present their case in the most effective manner possible, increasing the chances of the SEC taking action and securing a larger reward.

2. Ensuring Eligibility for the Maximum Payout

The SEC sets whistleblower rewards between 10% and 30%, depending on the circumstances. An attorney can help ensure that the whistleblower is eligible for the highest possible percentage by demonstrating the significance of the information and the assistance provided during the investigation.

Attorneys are skilled in highlighting the whistleblower’s contributions to the case, which can lead to a larger percentage of the monetary sanctions being awarded.

3. Broadening the Scope of the Case

Experienced SEC whistleblower attorneys are trained to identify additional violations that may be relevant to the case. By broadening the scope of the report, an attorney can help increase the penalties imposed by the SEC, resulting in a larger pool of monetary sanctions from which the whistleblower’s reward will be calculated.

For example, a whistleblower may report insider trading, but an attorney may identify related violations, such as market manipulation or fraudulent accounting practices, which could lead to higher penalties.

4. Maintaining Anonymity to Avoid Retaliation

Many whistleblowers are concerned about retaliation from their employer or other entities. Under the SEC Whistleblower Program, individuals can file anonymously if they work with an attorney. This not only protects their identity but also ensures they remain eligible for rewards.

An attorney acts as a shield, filing the whistleblower’s information and communicating with the SEC on their behalf. This allows whistleblowers to report violations without fear of losing their job or suffering personal or professional harm.

5. Handling Appeals for Reward Determinations

If the SEC awards a lower percentage of sanctions than expected, whistleblowers have the right to appeal the decision. Filing an appeal requires legal expertise, as the whistleblower must present a compelling argument as to why they deserve a higher reward.

A seasoned SEC whistleblower attorney will carefully review the SEC’s reasoning and prepare an appeal that emphasizes the whistleblower’s role in the case. Attorneys know how to navigate the appeals process effectively, which could lead to an increase in the final reward amount.

Recent Examples of High-Value Whistleblower Rewards

Since the SEC Whistleblower Program began, it has awarded over $1 billion to whistleblowers. Some of the largest rewards include:

• $114 Million in October 2020: This record-breaking award was granted to a whistleblower who provided detailed information that led to successful enforcement actions against multiple companies. The whistleblower’s attorney played a pivotal role in ensuring their anonymity and maximizing the payout.

• $50 Million in March 2018: This award was given to two whistleblowers who helped the SEC uncover widespread corporate fraud. Their attorneys helped package the information in a way that made it actionable for the SEC, leading to one of the highest payouts in the program’s history.

• $39 Million in September 2018: In this case, the whistleblower provided key information that led to a multi-million dollar enforcement action. The whistleblower’s attorney worked to ensure that the client received the maximum percentage possible, resulting in a substantial payout.

These examples highlight how whistleblowers, with the help of experienced attorneys, can receive life-changing financial rewards by reporting corporate misconduct.

Conclusion

For whistleblowers, maximizing the financial reward from the SEC Whistleblower Program requires careful legal strategy and expert representation. Working with an experienced SEC whistleblower attorney ensures that your submission is strong, your eligibility for the highest reward is clear, and your rights are protected throughout the process. With the potential for multi-million-dollar rewards, having the right attorney by your side could make a significant difference in the outcome of your case.