SEC Whistleblower Representation
In the wake of the global financial crisis, as the country debated how to break the cycle of corporate scandal that had plagued the markets, our country's financial watchdogs landed on two fundamental truths: The investor protection status quo wasn’t working; and law enforcement couldn’t effectively and efficiently police the marketplace without help from knowledgeable individuals. By way of response, in July 2010, the SEC Whistleblower Program was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act. This innovative program offers eligible SEC whistleblowers significant monetary awards, employment protections and the ability to report possible securities violations anonymously. The founder of our practice, leading SEC Whistleblower attorney, Jordan Thomas, played a leadership role in the development of the SEC Whistleblower Program, including assessing the program’s viability, lobbying the Commission and Congress, and drafting the proposed legislation and implementing rules.
On behalf of three SEC whistleblower clients, our team secured an $83 million award, the largest bounty in the history of the Commission's program.
With few exclusions, any individual or group of individuals, regardless of citizenship, can be an SEC whistleblower. In fact, a whistleblower doesn’t have to be employed by the entity at issue. To be eligible for a monetary award, whistleblowers must voluntarily provide the SEC with original information about a possible violation of the federal securities laws. Companies and organizations cannot be SEC whistleblowers.
An SEC whistleblower may report any violation of the federal securities laws that has occurred, is ongoing, or is about to occur. The reported misconduct may occur anywhere in the world. In most cases, SEC enforcement actions involve manipulative and deceptive practices associated with the purchase or sale of a security. Beyond stocks and bonds, the federal securities laws have interpreted “security” broadly to include investment contracts, notes and other non-traditional investments.
There is no ceiling for an SEC whistleblower award. The amount of an award is determined by the monetary sanctions levied against the defendant company. Under the law, eligible whistleblowers are entitled to 10-30% of the monetary sanctions collected by the SEC in a successful enforcement action where the sanctions exceed $1 million.