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Filing a SEC Whistleblower Complaint

January 26, 2024

With hundreds of millions of dollars in SEC whistleblower awards, individuals constantly are asking storied whistleblower law firms like Brown, LLC how to file an SEC Whistleblower Complaint.  Here’s some advice regarding filing a SEC Whistleblower Complaint, with very strong advocacy to retain an SEC whistleblower law firm before filing to help guide you through the process and protect your anonymity.

SEC Whistleblowers in Recent News

On December 22, 2023, the Securities and Exchange Commission (SEC) announced seven individuals were awarded over $28 million as an SEC whistleblower award for their contribution to a successful SEC enforcement action. [1] Similarly, on August 25, 2023, the SEC reported that more than $18 million was granted to an SEC whistleblower  as an SEC whistleblower reward because of disclosed information that led to the opening of an SEC investigation, with the whistleblower’s contributing greatly to the success of the SEC’s investigation. [2]

How are whistleblowers paid?

A whistleblower may be eligible for an SEC whistleblower award if their report to the SEC consists of novel and specific information, and their cooperation helps lead to a successful enforcement action. When monetary sanctions from a successful enforcement action exceed $1 million, the whistleblower may receive 10 to 30 percent of the money collected from a separate investor protection fund. Congress established an investor protection fund financed completely by monetary sanctions from SEC securities law violations. (Ibid.)

How does one file a Whistleblower complaint with the SEC?

First and foremost, it is highly advisable to speak with an SEC  whistleblower attorney before taking any steps. The SEC receives thousands of tips each year and in order to maximize your chance of receiving an award, the tip should be concisely presented with the operative facts, laws and regulations crisply cited to help triage the matter. If the matter is written in layperson terms the complaint may be glossed over and even if it would otherwise be actionable may be inadvertently ignored. Further, an experienced SEC whistleblower attorney can help answer any questions you may have and you could potentially remain anonymous with a whistleblower law firm from start to finish with your identity even guarded from the SEC itself.

Whistleblowers’ Important Role and the SEC Whistleblowing Purpose

A “whistleblower” is someone who voluntarily reports original information in writing to the SEC about a possible violation of federal securities laws. This can be a violation that has already occurred, an ongoing issue, or one considered reasonably likely  to occur. More than one person can act as a whistleblower. The person whistleblowing does not have to be an employee of the company or organization to submit information about that company or organization, however as an outsider the prism in which the information will be viewed will be under a much more stringent standard. [3]

Congress enacted Section 21F of the Exchange Act to encourage whistleblowers to report potential securities laws violations. In order to embolden whistleblowers to take such action, the Act provides financial incentives, some confidentiality protections, and mitigates possible employer retaliation. [4] According to the Chief of the SEC’s Office of the Whistleblower, “Whistleblowers continue to play an essential role in assisting the agency in detecting misconduct and bringing securities law violators to justice.” (n 2).

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Which wrongdoings can a SEC Whistleblower disclose?

Unfortunately, there is a plethora of fraud and other wrongdoings that often take place in the realm of securities. The wrongdoings that lead to SEC whistleblowing may include:

  • Unregistered or fraudulent offers or sales of securities
  • Ponzi schemes, Pyramid schemes, and High-Yield Investment programs
  • Misappropriation or theft of funds or securities
  • Misleading, or inaccurate company statements such as false SEC reports or financial statements
  • Not filing required SEC reports
  • Manipulating a security’s price or volume
  • Insider trading (stock exchange trading that is advantageous based on access to confidential information)
  • Improper payments or other bribery to foreign officials
  • Fraudulent actions related to municipal securities transactions or public pension plans[5]
  • Any matter in which the fiduciary places its interests ahead of the clients’ interests
  • Destruction of audit trails and/or failure to preserve communications with the clients

A whistleblower law firm is an indispensable resource that not only can assist with protecting your identity, but can also guide you each step of the way so you don’t miss any steps. The SEC whistleblower program only takes a few select cases each year and the clock could run out on you claiming an SEC whistleblower award. Hence, there’s too many potential perils to file it pro se, and much more upside to use counsel.

SEC Whistleblower Protections and SEC Whistleblower Rewards

The Dodd-Frank Wall Street Reform and Consumer Protection Act broadened whistleblower protections. For example, under the Dodd-Frank Act, the SEC aims to preserve whistleblower confidentiality, and does not reveal information related to a whistleblower that could compromise their anonymity. The use of an SEC whistleblower law firm can further safeguard a whistleblower’s identity.

An employer cannot take adverse action against their employee for reporting conduct to the Commission if the employee reasonably believed the conduct reported was a violation of federal securities laws. Employer retaliation that is typically prohibited includes suspension, harassment, demotion, discharge, or other discrimination. Dodd-Frank affords a private right of action that gives whistleblowers the right to file a retaliation complaint in federal court. If a whistleblower believes they are being retaliated against by their employer because of their written security law violation reported to the SEC, that individual might be able to sue that employer in federal court for double back pay with interest. Other recoveries that can be sought could potentially include reinstatement or reimbursement for certain attorney’s fees and other litigation costs. [6] A seasoned whistleblower attorney can facilitate a better understanding of specific whistleblower protections such as the time frame a whistleblower must file a private action in federal court under Section 922 of the Dodd-Frank Act.

How an SEC Whistleblower Law Firm Helps

While the decision to come forward with information about securities fraud or other wrongdoing is certainly noble, it is not always easy, especially if the whistleblower is trying to navigate the process on their own. An SEC whistleblower attorney can provide necessary support and answer any questions.

On top of the whistleblower award eligibility requirements already discussed, whistleblower rules lay out further mandatory instructions regarding the form and way a whistleblower must disclose information. For example, Under Rule 21F-9, the information must be declared under penalty of perjury with a Form TCR or through the SEC’s online TCR portal.  To initiate an SEC whistleblower action the individual must file a TCR with the SEC. TCR stands for Tips, Complaints, and Referrals. From there, there is a lengthy process in which various dockets must be monitored to ensure that if your information is used that you claim an award, the SEC doesn’t just tell you. (n 3). An SEC whistleblower lawyer is in the perfect position to help ensure a whistleblower completes such reporting procedures accurately.

Call an SEC whistleblower attorney to get the support you need and maximize your award eligibility potential.

This article does not constitute legal advice or legal representation.

[1] https://www.sec.gov/news/press-release/2023-257

[2] https://www.sec.gov/news/press-release/2023-161  

[3] https://www.sec.gov/files/amended-whistleblower-rules-2022.pdf

[4] https://www.sec.gov/whistleblower/frequently-asked-questions

[5] https://www.sec.gov/tcr

[6]https://www.sec.gov/whistleblower/retaliation#:~:text=The%20Congressional%20purpose%20underlying%20Section,and%20providing%20various%20confidentiality%20protections