Since its humble beginnings following the Dodd-Frank Wall Street Reform and Consumer Act of 2010, the SEC Whistleblower Program has continuously proven to be a powerful force against fraud and a beneficial partnership between the SEC and whistleblowers. More than $130 million has been awarded to whistleblowers who report Securities Fraud to the SEC since the commencement of the program, including the massive $57 million awarded to whistleblowers in Fiscal Year 2016.  Fiscal Year 2017, which started in October, 2016, is already looking to beat that number, as $20 million was recently awarded to a whistleblower in mid-November.

According to Jane Norberg, Chief of the SEC Whistleblower Office, in her annual report to Congress, the SEC Whistleblower Program is successful:

Because of the key features of the whistleblower program—protecting the confidentiality of individuals who report through the program, taking action against employers who retaliate against or interfere with their employees’ ability to report wrongdoing to the agency, and awarding whistleblowers whose information leads to successful enforcement actions . . .

Whistleblowers who report Securities Fraud to the SEC are entitled to receive up to 30% of recoveries over $1,000,000. Unlike the False Claims Act, whistleblowers who report Securities Fraud to the SEC can remain anonymous if they are represented by counsel, meaning unless the whistleblower publicizes the award, there is no way to track the award with any specific case. However, the SEC does publicize the amount awarded to the whistleblower. Two of the highest awards ever were awarded to whistleblowers in 2016: a $22 million reward to a whistleblower in August, 2016 for reporting a violation that would have never been discovered and a $17 million reward to a whistleblower in June, 2016 for substantially advancing an investigation.

Also unlike the False Claims Act, whistleblowers can be rewarded for reporting unique publically available information and whistleblowers do not need to be first in alerting the SEC about the fraud so long as the information substantially assists in an already open SEC investigation.

Similar to the False Claims Act, the SEC Whistleblower Program has an anti-retaliation provision, meaning whistleblowers cannot be retaliated against for reporting Securities Fraud. The SEC even has authority to bring stand-alone retaliation cases against companies for retaliating against employees who report fraud to the SEC, a power the SEC used this year against corporate giants like Anheuser-Busch InBev SA/NV and International Game Technology.

According to Alan J. Konigsberg, Chair of the Whistleblower Department and Founding Partner at Levy Konigsberg LLP, a law firm dedicated to representing whistleblowers worldwide:

The willingness of the SEC to prosecute these cases on behalf of whistleblowers is a welcome sign for all. Courageous individuals who blow the whistle on fraud can face retaliation for doing the right thing. The SEC’s aggressive prosecution of both the fraud and the retaliation helps protect whistleblowers and offers them a reward for their bravery. Hopefully this trend continues, and we continue to see a rise in whistleblower rewards and protection.

If you have knowledge that a public corporation is engaging in Securities Fraud or other fraudulent activities, then give us a call today for a free consultation and case review with an experienced whistleblower attorney.





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