The SEC Whistleblower Program awards individuals who voluntarily provide the SEC with original information of financial fraud that leads to successful enforcement action.
Whistleblower 101: Understanding The Securities and Exchange Commission (SEC) Whistleblower Program
If you are considering blowing the whistle on financial fraud, you may want to brush up on your knowledge of the SEC and its whistleblower program. Financial fraud involves hedge funds; financial advisors; or banks and corporations which violate securities and banking law regulations thereby defrauding investors or shareholders through the use of fraudulent accounting practices.
For this type of fraud, the SEC has systems in place to both protect and reward the whistleblowers who help them. But, what is the SEC and how does the whistleblower program work?
What is The SEC?
The U.S. Securities and Exchange Commision (SEC) is a federal government agency, established by Congress in 1934, with three main objectives:
- Protect the interests of investors
- Strive for the preservation of honesty, fairness, and order in the markets
- Encourage and facilitate the increase of capital goods in the United States
The SEC Whistleblower Program
When it comes to the goals of the SEC, whistleblowers play a key role. Individuals who come forward with detailed reports of fraud, are in a position to render the SEC unparalleled insight into wrongdoing of others. This allows the proper actions to be taken, enhancing the SEC’s ability to protect its investors.
The Securities and Exchange Commission whistleblower program was developed to facilitate this process and offer incentive for successful investigations.
Through this program, whistleblowers can file a claim, receive protection, and be rewarded with a monetary award. To learn more about this award, click here.
How To Submit Information
Information regarding any relevant wrongdoing needs to be submitted to the SEC in order to be eligible for the whistleblower program. There are a couple ways to do this, such as:
- Filling out an online questionnaire on the SEC’s website
- Completing a hardcopy of the Tip, Complaint, or Referral Form (Form-TCR)
The best way to submit information to the SEC is to contact an attorney experienced in this type of law. Such counsel will carefully review all of your information and make sure that it is submitted properly for the best results.
The SEC will not disclose the names or identifying information of the whistleblowers.
Example Cases/SEC Whistleblower Awards
To date, the SEC has issued more than $150 million in awards to whistleblowers.
The largest whistleblower award doled by the agency was issued in September of 2014. An anonymous whistleblower living in a foreign country was awarded more than $30 million for providing information about an ongoing fraud. This settlement highlights the fact that non-US citizens are eligible for an award under the SEC whistleblower program.
A former Monsanto Co executive, who tipped the SEC to accounting improprieties involving the company’s Roundup product, was awarded more than $22 million in August of 2016. The award resulted from an $80 million settlement between the SEC and Monsanto. This was the agency’s second largest whistleblower award.
The third largest SEC whistleblower award amounting to $20 million was issued in November of 2016 to an anonymous whistleblower.