What Happens After I Apply for an SEC Whistleblower Award?

SEC whistleblower reward applications are often reviewed by the staff at the SEC, specifically by the Office of the Whistleblower and other relevant divisions or offices, depending on the nature of the tip.

The Claims Review Staff (CRS) is an integral part of this process. The CRS will review the applications and make a preliminary determination regarding whether an award claim should be granted and the amount of such an award.

After the CRS’s preliminary determination, claimants have an opportunity to request a review of the determination by the Commission itself.

Once you submit your application, the SEC Office of the Whistleblower conducts a preliminary review. This initial assessment determines whether the application is complete and if it meets the basic criteria for an award. If any information is missing or if there are immediate disqualifying factors, the applicant may be notified at this stage.

The SEC evaluates then evaluates the quality, accuracy, and specificity of the information you’ve provided. Critical factors include whether the information was original and led to a successful enforcement action, and whether it caused the SEC to open a new investigation or significantly assisted an ongoing inquiry.

Once the SEC has taken enforcement action based on the information provided, and if the action results in monetary sanctions exceeding $1 million, the Claims Review Staff (CRS) will evaluate the claim. They assess the significance of the whistleblower’s information, the degree of assistance provided, the program’s interest in deterring violations, and any potential negative conduct by the whistleblower.

After reviewing the claim, the CRS will issue a Preliminary Determination. This document will either propose an award or deny the claim. If an award is suggested, it will also indicate the award’s percentage, which typically ranges between 10% to 30% of the total monetary sanctions collected.

Whistleblowers have the right to contest a Preliminary Determination if they disagree with it. They can view the record that formed the basis for the CRS’s decision and present a written statement to argue their case.

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How Do I Appeal an SEC’s Whistleblower Award Determination?

After considering the whistleblower’s input (if any is provided), the CRS will make a Final Determination. This is the concluding step where the SEC decides whether or not to grant an award and determines its exact amount.

Once the Final Determination is made, the award payment process begins. Awards are paid from the SEC’s Investor Protection Fund, which is financed through monetary sanctions paid to the SEC by securities law violators. The exact timing of the payment can vary, depending on various factors such as the collection of sanctions and other administrative processes.

Throughout the entire process, the SEC maintains stringent confidentiality provisions. While certain circumstances may necessitate the SEC to share information with other entities (like other regulatory or law enforcement agencies), efforts are always made to protect the whistleblower’s identity.

The SEC Whistleblower Program stands as a beacon of hope in ensuring that the U.S. financial markets operate with integrity and transparency. This detailed process, from the initial submission of information to the final award payment, illustrates the SEC’s meticulous approach to recognizing and rewarding those who step forward in the interest of justice.

It also underscores the SEC’s dedication to both safeguarding the integrity of the market and protecting the brave individuals who come forward. With professionals like Allison Herren Lee supporting whistleblowers through their journey, individuals can find expert guidance and assurance as they navigate this intricate yet vital program.