What is the Full Process for an SEC Whistleblower to Receive a Reward?
Whistleblower reports can significantly enhance the SEC's enforcement of the law by enabling the Commission to identify fraud and other violations more efficiently and earlier than it otherwise could. Consequently, whistleblowers help the Commission safeguard investors, preserve the integrity of U.S. capital markets, and bring to justice those involved in illicit conduct.
Written By
KKC Staff
Reviewed By
Updated
October 5, 2023
Whistleblower reports can significantly enhance the Security and Exchange Commission (SEC) enforcement of the law by enabling the Commission to identify fraud and other violations more efficiently and earlier than it otherwise could.
Consequently, whistleblowers help the Commission safeguard investors, preserve the integrity of U.S. capital markets, and bring to justice those involved in illicit conduct.
To reward these efforts, Congress has authorized the Commission to financially compensate whistleblowers who supply high-quality, original information leading to a Commission enforcement action that results in over $1,000,000 in ordered sanctions.
The whistleblower awards can range between 10% and 30% of the money collected in the enforcement action, and to date, the SEC has awarded more than $1 billion to numerous individual whistleblowers since the inception of the SEC whistleblower award program.
The Commission’s Office of the Whistleblower (OWB) supervises the agency’s whistleblower program. The office processes award claims and fulfills various responsibilities, such as responding to daily public whistleblower hotline calls, receiving whistleblower tips, and providing guidance on matters like confidentiality and retaliation protections.
Welcome Allison Herren Lee to the Firm
Allison Herren Lee is now Of Counsel at Kohn, Kohn & Colapinto, where she is ready to serve and protect whistleblowers, and help them seek rewards under the Dodd-Frank Act and SEC Whistleblower Program. If you’re an SEC whistleblower seeking to report a concern, contact Kohn, Kohn & Colapinto today to speak confidentially with Allison.
A Detailed Look into the Reporting Process
The OWB performs a comprehensive evaluation and processing of whistleblower claims, which is categorized into two main phases:
Phase One: Initial Evaluation and Prioritization of Claims
The first phase involves the preliminary sorting and prioritization of the claim for a more in-depth analysis. To assess whether a claim is likely to lead to an award, the OWB considers factors such as the details in the claimant’s application, any whistleblower tips related to the claim, and any interactions the claimant had with the Commission’s enforcement staff.
Once this initial evaluation is complete, the OWB typically starts the in-depth analysis of claims within each group (e.g., likely meritorious vs. likely non-meritorious) on a first-come, first-served basis. However, certain factors can cause the OWB to consider a claim earlier or later, such as:
- Claims that appear to be frivolous
- Cases where no monetary sanctions have been collected
- Claims with overlapping facts
- Claimants with serious health concerns
- Other unique facts and circumstances associated with a claim
Phase Two: In-Depth Analysis and Claim Recommendation
After the OWB begins an in-depth examination of an award claim, several factors can influence the time it takes to finish the process and prepare a recommendation. These factors include:
- Cases with multiple claimants, which can prolong the analysis and processing time
- Requests for reconsideration, which may require the OWB to address new factual and/or legal issues
- The presence of complex legal issues that necessitate consultation with other Commission offices
- Situations where additional information or input is required from other parties, such as other government agencies or the claimant
The OWB employs a systematic and thorough approach to handle whistleblower claims, ensuring every report is given due consideration and is evaluated on its merits. This rigorous process ultimately helps maintain the integrity of the financial markets and provides whistleblowers with the protection and rewards they deserve for their essential contributions.
The SEC undertakes inquiries into potential infringements of federal securities laws. As a rule of thumb, a whistleblower tip that is detailed, trustworthy, and submitted promptly has a higher chance of being sent to the investigative team for additional examination or investigation.
Don’t Delay. Act Today.
Don’t delay. Act today. The SEC is looking for tips that are specific, credible, and timely. Experienced counsel can help you submit a whistleblower tip that navigates the complex rules and procedures. Protect the integrity of our financial markets and stand up against fraud. Your information can make a world of difference.
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