SEC Whistleblower Attorney
The U.S. Securities and Exchange Commission (SEC) relies on whistleblowers to aid in its fight against securities fraud in all segments of the industry. The SEC’s whistleblower program incentivizes coming forward with significant financial compensation, though establishing your right to compensation can prove challenging in some cases. At Zamansky LLC, we help whistleblowers file claims with the SEC and recover the compensation they deserve; and, if you believe you have information about securities fraud, we encourage you to speak with an SEC whistleblower attorney at our offices promptly.
Do You Qualify as an SEC Whistleblower?
To qualify as an SEC whistleblower, you must be able to provide the SEC with information that (i) it does not already have, and (ii) it can use to pursue an enforcement action under the U.S. securities laws. The SEC refers to this as “new information” or “original information.” You must also submit your information, “in the form and manner required under the [SEC’s] whistleblower rules.”
The SEC has jurisdiction over all types of securities law violations. This means that you may qualify as a whistleblower if you are able to provide the SEC with information about a legal or regulatory violation such as:
- Conducting an unregistered securities offering
- Keeping false books and records
- Filing inaccurate reports with the SEC
- Making false public statements about a company’s financial performance or securities
- Manipulating a company’s share price
- Insider trading
- Theft or misappropriation of corporate funds or securities
- Bribery or corruption
- Operating a Ponzi scheme or fraudulent high-yield investment program
- Engaging in any other conduct that violates a federal securities law or regulation
One of the keys to securing whistleblower protection and becoming eligible for whistleblower compensation is being the first to report information to the SEC. When you engage an SEC whistleblower attorney at Zamansky LLC, your attorney will work with you to submit your information in compliance with the SEC’s submission guidelines as soon as possible.
Understanding Your Legal Rights as an SEC Whistleblower
Whistleblowers have clear legal rights under the SEC’s whistleblower program. These include not only the right to financial compensation (in qualifying cases) as mentioned above, but also the right to confidentiality and protection against retaliation.
1. Compensation Under the SEC’s Whistleblower Program
Whistleblowers who report securities fraud to the SEC are eligible to receive financial compensation when the information they provide leads to enforcement action resulting in sanctions of $1 million or more. If the SEC orders sanctions of $1 million or more, then any monies recovered by other federal agencies (i.e., the CFTC, DOJ, or IRS) can be counted toward the total sanction amount as well.
When the total sanctions resulting from a whistleblower report exceed $1 million, the whistleblower is entitled to an award of between 10 and 30 percent of the total amount of the government’s recovery. In determining whistleblower awards, the SEC takes into account factors including:
- The significance of the information that the whistleblower provided in leading to the SEC’s successful enforcement action;
- Any additional assistance provided by the whistleblower and his or her SEC whistleblower attorney; and,
- The SEC’s “programmatic interest” in targeting the specific type of securities law violation (or violations) reported by the whistleblower.
The SEC has established a notice and application process for whistleblowers who believe they are entitled to compensation. As the SEC explains, “We will post . . . Notices of Covered Action (‘NoCA’) exceeding $1 million in sanctions so that whistleblowers who believe they voluntarily submitted new information that was used in the Covered Action will have an opportunity to apply for a whistleblower award,” and “[o]nce the case you believe your information led to is posted, you must complete and return Form WB-APP within 90 calendar days to the Office of the Whistleblower.” At Zamansky LLC, we monitor our clients’ cases on an ongoing basis, and we work directly with the SEC on behalf of our clients. As a result, when you choose an SEC whistleblower attorney at our firm, you will know when you are entitled to compensation, and your securities fraud attorney will work with the SEC to secure this compensation on your behalf.
2. Confidentiality of SEC Whistleblowers’ Identity
As a whistleblower, you have the right to decide when (and if) your identity becomes public. When you hire an SEC whistleblower attorney to represent you, you can even decide when (and if) to disclose your identity to the SEC. Under the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”):
“The [SEC] . . . shall not disclose any information, including information provided by a whistleblower to the [SEC], which could reasonably be expected to reveal the identity of a whistleblower . . . unless and until required to be disclosed to a defendant or respondent in connection with a public proceeding instituted by the [SEC].”
This means that if you intend to fully pursue your claim and cooperate with the SEC in order to maximize your whistleblower compensation, you will need to release your name eventually. However, in most cases, this comes well into the process, and well after the SEC has already determined that it has a case to pursue. Additionally, as discussed below, the SEC’s whistleblower protections prohibit companies from retaliating against employees who come forward with information about securities fraud.
3. Protection Against Retaliation from Your Employer
In addition to establishing SEC whistleblowers’ right to confidentiality, the Dodd-Frank Act also provides whistleblowers with protection against retaliation. The Securities Exchange Act, Exchange Act Rule 21F-17, and the Sarbanes-Oxley Act provide retaliation protections for whistleblowers as well.
If you experience retaliation despite these prohibitions, your SEC whistleblower attorney at Zamansky LLC can pursue a retaliation claim on your behalf. In whistleblower retaliation cases, the available remedies include reinstatement (if desired), double back pay, costs and fees, and other damages.
Frequently Asked Questions (FAQs): Filing an SEC Whistleblower Claim
How long do I have to file a whistleblower claim with the SEC?
Under the Dodd-Frank Act’s statute of limitations, whistleblowers have up to six years to report financial fraud and other forms of securities fraud to the SEC. This is intended, in part, to make it easier for whistleblowers to disclose information without fear of facing retaliation from their employers.
However, delaying your whistleblower claim can make it more difficult for the SEC to pursue enforcement action, and it also increases the likelihood that someone else will report the fraud before you do (in which case you would no longer be eligible for whistleblower compensation). Additionally, the SEC can reduce the amount of your award if it determines that you “unreasonably delayed” in coming forward. With all of these considerations in mind, if you believe you have inside information about securities fraud, we strongly recommend that you speak with an SEC whistleblower attorney as soon as possible.
What if I have an employment contract that prohibits me from disclosing inside information?
If you signed an employment contract that prohibits you from disclosing inside information, you should still consult with an SEC whistleblower attorney. Contractual provisions that discourage whistleblowing are prohibited under Exchange Act Rule 21F-17, which states: “No [company] shall take any action to impede an individual from communicating directly with the [SEC] about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement.”
As a result, if you face adverse employment action after submitting a whistleblower claim to the SEC, the Dodd-Frank Act’s retaliation provisions still apply—and your SEC whistleblower will be able to help you enforce these protections.
How much compensation can you receive as an SEC whistleblower?
The amount of compensation you can receive as an SEC whistleblower depends on the circumstances surrounding your claim. Since whistleblower awards start at 10 percent and are only available when new information leads to the SEC’s recovery of $1 million or more, the minimum whistleblower award is $100,000. However, SEC whistleblower awards can climb into the millions of dollars, and multi-million-dollar awards are not uncommon. In 2020, the SEC issued its largest ever whistleblower award, paying $114 million to an individual who took “extraordinary” actions to report corporate fraud.
What qualifies as “new information” or “original information” for purposes of filing an SEC whistleblower complaint?
Information that qualifies for SEC whistleblower compensation and protection includes information derived from your “independent knowledge” or “independent analysis.” As the SEC notes, certain information is excluded, including information that is protected by the attorney-client privilege and information that you learn from someone else through your company’s internal reporting systems.
Do I need an SEC whistleblower attorney to file a claim?
While you have the option of reporting your information to the SEC on your own, we strongly recommend hiring an attorney to assist you. This will ensure that you satisfy the SEC’s reporting requirements and establish your eligibility for compensation and protection. At Zamansky LLC, our attorneys can communicate with the SEC on your behalf; and, if you are entitled to whistleblower compensation, we can work to maximize the amount of your award.
Speak with an SEC Whistleblower Attorney in Confidence
If you would like to speak with an SEC whistleblower attorney at Zamansky LLC, we invite you to get in touch. Please call 212-742-1414 or contact us online to arrange a confidential consultation.