How to File Claims Anonymously As An SEC Whistleblower
One of the most important features of the SEC Whistleblower Program is that it allows whistleblowers to make disclosures anonymously.
If a whistleblower hires an SEC whistleblower attorney, their attorney can file the disclosure on their behalf and handle all communications with SEC staff. In order to claim a whistleblower award, a whistleblower will eventually need to disclose their identity to the SEC.
However, the Dodd-Frank Act provides strong confidentiality protections to SEC whistleblowers and the agency is committed to protecting the identity of all whistleblowers.
The SEC is well aware that the ability of whistleblowers to report anonymously is central to the success of its whistleblower program. In a 2018 proposal to amend the whistleblower program’s rules, the SEC noted that:
“The monetary incentive is one component in a package of reporting incentives… which includes employment retaliation protections and confidentiality requirements (including, critically, the ability of whistleblowers to remain anonymous through the course of an investigation and resulting enforcement action).”
The Commission further noted that:
“The ability to report anonymously is an additional attractive feature of our program that helps to encourage company insiders and others to come forward by lessening their fear of potential exposure.”
SEC whistleblowers can make anonymous whistleblower disclosures about a wide variety of securities law violations, including information about Ponzi schemes, the theft or misuse of funds, insider trading, fraudulent or unregistered securities offerings, and false or misleading statements about a company.
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A Step-by-Step Guide to Filing an Anonymous SEC Whistleblower Claim
1. Hire an SEC whistleblower attorney
Hire an SEC whistleblower attorney. This is a requirement in order to file an award anonymously and be eligible for a whistleblower award.
2. Collect evidence
Compile the information to be shared with the SEC about potential securities law violations and fill out a Form TCR, the official SEC whistleblower complaint form.
3. Sign the Form TCR under oath
The TCR form is a form that a whistleblower fills out to (a) provide the SEC with essential information, and (b) make claims against the party who the whistleblower has evidence regarding a violation of security law. The form and information on that form can be supplemented with attachments, but submission of the form initiates the process as far as the SEC is concerned.
4. Send TCR to Attorney
Instead of filing the Form TCR with the SEC, submit the form to hired legal representation. The whistleblower’s attorney will need to obtain proof of the anonymous SEC whistleblower’ identity, usually through a copy of the whistleblower’s passport or driver’s license. The attorney is under an ethical obligation to maintain the identity of his or her client, unless the client waives that right.
5. Attorney Drafts TCR
Thereafter, the attorney fills out another TCR form, with the precise information provided by the whistleblower, signs the form, and files the form on behalf of the whistleblower. In this way the SEC only knows the identity of the whistleblower’s attorney, and the identity of the anonymous SEC whistleblower remains confidential.
The whistleblower can maintain his or her anonymity throughout the investigation. However, once the SEC sanctions a company for over $1 million, the whistleblower is required to file a new form, known as the APP form, in order to request the payment of a reward.
7. Award Application
At the time an APP form is filed, the SEC can require that the identity of the whistleblower be provided, and can require proof that the whistleblower provided to his or her attorney the signed TCR form and proof of identity prior to the attorney’s filing the reward claim.
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Frequently Asked Questions
Whistleblowers can file anonymous claims with the SEC, as long as they hire an SEC whistleblower attorney. By hiring an attorney, the SEC only knows the name of the attorney, and not the whistleblower – who’s identity remains confidential.
SEC whistleblower award amounts are determined by the total monetary sanctions collected from a fraudulent company or person. Whistleblowers are entitled to between 10% and 30% of the sanctions collected in a successful enforcement action, where the crime exceeds $1 million. The percentage a whistleblower receives all depends on the originality, credibility, and timeliness of the information provided to the SEC.
Original information is information only a person has independent knowledge of, as a result of first-hand observation or independent analysis, and which is also not derived from publicly available information. In other words, you have first-hand information of a fraud or violation that no one else knows about.
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