Filing a SEC Whistleblower Complaint

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).

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. Take action now and partner with the best SEC whistleblower attorneys to hold wrongdoers accountable.

Hundreds of millions of dollars have gone to SEC whistleblowers who blow the whistle the right way through the right SEC whistleblower law firm and best of all, they can stay anonymous from start to finish! The Securities and Exchange Commission (SEC) plays a critical role in safeguarding the integrity of the financial markets and protecting investors through its regulatory functions. But it can’t be everyone all at once, so it relies on insiders to disclose information to advance successful enforcement actions. Brown, LLC is a law firm that protects whistleblowers, conveniently located in Wall Street West, but representing clients all over the world who wish to blow the whistle – we offer free confidential, SEC Whistleblower consultations and we’re only paid if we win your case. If you’re thinking about blowing the whistle on an SEC violation we encourage you to contact our office and in any event here are some key strategies in filing a TCR with the SEC – the mechanism that alerts the SEC to a whistleblower complaint.

Someone who represents himself has a fool for a client, and even more so with the SEC where if you file without SEC counsel you lose anonymity abilities and prejudice your ability to advance your case in the most efficient manner. With hundreds of millions given in whistleblower rewards, the office is inundated with whistleblower tips, so you want to present your case in the most efficient, precise manner, with a tight factual narrative couched in what the regulatory violation is. Some major streams of SEC enforcement actions involve when the financial entity puts its own interests before its clients, ponzi schemes, price gouging or churning and deliberate absence of audit trails, but almost anything that seems wrong may be wrong, so it’s best to vet your fact pattern with an SEC whistleblower attorney to see if what you know is actionable.

Filing a successful SEC whistleblower lawsuit may seem like a daunting task, but understanding some key strategies can greatly enhance the chances of a favorable outcome. This article explores the vital elements necessary for a successful SEC whistleblower lawsuit, emphasizing the importance of evidence, confidentiality, legal representation, and cooperation with the SEC.

Understand the SEC Whistleblower Program

Before embarking on the journey of becoming an SEC whistleblower, one must fully comprehend the SEC Whistleblower Program’s nuances. Familiarize yourself with the rules, eligibility requirements, and the types of violations that fall within the program’s scope. Understanding what the SEC considers as eligible violations can help ensure your claim is relevant and actionable. You don’t want to file something through the portal that you put your name to only to find out later that the action is perfectly legal. Also, the SEC program is quite quirky – they may use your information, take an enforcement action and not notice you!!! You need to keep track of the portal and if you see an enforcement action based on your information you need to put in for the award yourself. As an SEC whistleblower law firm we’ve advocated for changes in the system to make the process more user friendly, but for now, it’s a bit opaque at times.

Gathering Concrete and Credible Evidence

The cornerstone of a successful SEC whistleblower lawsuit is compelling evidence. Concrete and credible evidence demonstrating violations of federal securities laws is essential. Collect all relevant documents, records, emails, and other evidence that substantiate your claims. Be diligent in maintaining a well-organized collection of evidence, as this will significantly bolster your case and strengthen the SEC’s

ability to investigate. However, it is EXTREMELY IMPORTANT to only accumulate evidence that you are normally entitled to access. If you go beyond your scope of access, you may find yourself terminated, or worse, have criminal exposure. If you’re uncertain whether you can or can’t access something, take a breath and seek legal counsel to advise you about how to proceed. Also, with SEC violations, some proofs may be in the activities themselves rather than the documents, and the earlier you have strategic planning from a whistleblower attorney the better off you will be.

Preserve Confidentiality

Maintaining confidentiality is paramount when filing an SEC whistleblower lawsuit. Whistleblowers often fear retaliation from their employers or colleagues, which can negatively impact their careers, even though the statutes have strong protections against retaliation. If you file by yourself you have to commit your name to the complaint, If you use an SEC whistleblower law firm, you don’t. That’s only half the battle, if you have information so singular in nature if it’s written up with that level of specificity you will burn yourself as the source. It’s an art to truthfully write up the information but conceal its origins yet impress upon the SEC that the information is reliable and from a person in a position to know. You should look to work with a law firm that has worked with confidential sources which is why it’s sometimes advantageous to work with a firm like Brown, LLC which is led by a former FBI Special Agent who ran undercover operations and knows how important it is to try to keep anonymity for sources.

Promptly Report the Violations

Time is of the essence in filing an SEC whistleblower lawsuit. Delays in reporting violations can diminish the significance of evidence and reduce the likelihood of successful enforcement actions. The SEC has specific time limitations for reporting violations, so it is crucial to act promptly and decisively when you suspect wrongdoing. However, even if the scheme has been going on for a long time it’s better to report rather than continue to secrete. Even though delay may impact the extent of the SEC Whistleblower reward if any, there still may be an award. Further, if there are criminal implications you should tease that out with your SEC counsel and reporting may put you in a superior position to not be viewed as a target versus waiting and then when the FBI comes knocking you have no excuse that you didn’t disclose.

Cooperate Fully with the SEC

Cooperating fully with the SEC during its investigation is crucial to the success of your whistleblower lawsuit. Be prepared to provide all the necessary information, evidence, and documentation to aid the SEC’s efforts. Your willingness to collaborate demonstrates your commitment to the process and enhances the credibility of your claim. Your SEC whistleblower law firm will assist in every step of this from the documented proofs to preparing you for any interview the SEC will have with you.

Understand SEC Whistleblower Rewards

The SEC Whistleblower Program offers incentives for individuals who provide valuable information leading to successful enforcement actions. Depending on the outcome of the case, whistleblowers can receive monetary awards ranging from 10 to 30 percent of the monetary sanctions collected by the SEC. Familiarize yourself with the SEC’s whistleblower award criteria to have a clear understanding of the potential rewards. You need to be accurate, incisive, and prompt, but half the battle is what you have, the other half is how you present – you need to work with a firm that presents the matter in the best possible light and maximizes your chance to receive an SEC whistleblower award.

Becoming an SEC whistleblower is a courageous step towards ensuring fairness, transparency, and integrity in the financial markets. A successful SEC whistleblower lawsuit requires comprehensive understanding of the program, compelling evidence, confidentiality, legal representation, prompt reporting, and cooperation with the SEC. By adhering to these key strategies, whistleblowers can contribute significantly to the SEC’s efforts in detecting and preventing securities violations, ultimately protecting investors and the financial well-being of the nation. If you’ve made it this far and are thinking about blowing the whistle, give our SEC whistleblower law firm a call for a free, confidential consultation at (877) 561-0000. We can arrange to speak after hours or on weekends when it’s most convenient for you or we can secretly meet at one of our offices overlooking the Hudson if you’re in the area. Do the right thing and learn your rights as an SEC whistleblower.

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