Whistleblower Tips Reach Historic Levels at the SEC in Fiscal Year 2023
True insiders in financial companies have received hundreds of millions of dollars in SEC whistleblower rewards and remained anonymous with an SEC whistleblower law firm.
Between October 1st, 2022, and September 30th, 2023, the SEC Whistleblower Program received a record 18,000 whistleblower tips. It is a substantial increase from the 2022 fiscal year, when there were over 12,000 tips, which set a record at the same time last year. Now more than ever it’s important to work with an SEC whistleblower law firm to file your tip. The volume has increased to such a degree that in order for the SEC to streamline the submission it needs to be presented in a succinct manner, otherwise it will probably just be laid to rest. With the use of an SEC attorney you can potentially stay anonymous throughout the process.
There are certain reasons why it is ascertained that whistleblower tips are going up. One significant reason is due to a couple of rule changes from 2022 at the SEC pertaining to its whistleblower program.
- The SEC is now allowed to pay whistleblowers for their information and assistance in connection with non-SEC actions such as assisting with a related action with respect to a different governmental entity.
- The SEC’s authority to increase a potential award, but not to lower it is emphasized and affirmed
Other Noted Reasons for an Increase in Whistleblower Tips
- Large awards for true insider information. Hundreds of millions of dollars have been paid in SEC whistleblower awards.
- Anonymity – true insiders in high up positions value secrecy, so with the knowledge that they can stay anonymous is a healthy incentive to step forward.
- The proliferation of hybrid and remote work has made it easier than ever to gather evidence, perhaps by taking screenshots of emails or documents.
- Additionally, international tips have become more prevalent with the interconnectedness of the global economy, with participants including employees from international firms in over 130 countries across the world.
- It is also believed that the publicity of significant whistleblower awards has encouraged more insiders to blow the whistle. Seeing a large financial award for someone else may have a cascading effect on individuals’ decisions.
- There is also strong evidence that employees are collectively more in tune with violations of regulatory and securities laws.
- For example, the recent wave of hundreds of millions of dollars of whistleblower awards went to individuals who filed SEC TCRs on their company’s failure to maintain audit trails and/or deliberately destroying or failure to preserve communications with its clients. Once the insiders became aware of the nature of the scheme the SEC seeks to punish tips along those lines became prominent.
- Also, SEC tips regarding companies who inserted language in agreement that prohibited them from cooperating with government investigations increased as an increasing number of companies were punished.
The emerging field of cryptocurrency has led to a proliferation of scams, such as FTX and Celsius, which allegedly engaged in Ponzi Schemes. While the CFTC and SEC are dueling it out jurisdictionally about cryptocurrency jurisdiction, with the exponential increase in cryptos and the commensurate scams, there’s no shortage of complaints.
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On the flip side, many complaints are filed by people and firms that just don’t know what they’re doing clogging the system, which is why it’s critical to consult with an SEC whistleblower law firm before filing. Oftentimes, claimants come to the SEC attorney after they’ve filed the matter and already prejudiced their case.
It is undeniable that the incentives for reporting wrongdoing are stronger than ever with tremendous amounts of money for doing the right thing in concert with a cloak of invisibility.
A whistleblower reform act has also been proposed in congress; demonstrating the widespread desire to bolster protections for anti-retaliation measures of protection and expedite the delivery of payments allocated to whistleblowers for their cooperation with the SEC. This legislation indicates that recognition for the bravery of whistleblowers is a top priority.
There are currently, even before this proposed whistleblower reform act gets air in its sails, many existing protections for whistleblowers that should give you peace of mind.
Did you know:
- Dodd-Frank enabled the SEC to take legal action against employers retaliating against whistleblowers.
- Your identity is protected by the SEC, and you have the right of confidentiality, but it’s not always 100% guaranteed.
- If you believe you were retaliated against, you can sue your employer for double back pay with interest, reinstatement, reasonable attorney’s fees, and reimbursement for litigation-related costs.
- There is a prohibition on anyone taking action to impede you from reporting wrongdoing.
SEC whistleblowing has caught on like it was supposed to and the volume of complaints is exceeding the bandwidth of the department. If you have insider information about an SEC scheme, you should consult with an experienced SEC whistleblower law firm, to blow the whistle the right way and potentially receive an award while having your valuable identity guarded.