New SEC Whistleblower Program Rewards Whistleblowers 10-30% of Recoveries
The new whistleblower program found in the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) is designed to reward any person who wants to blow the whistle on an individual or company that is violating, or has violated, the federal securities laws. The award paid by the SEC is substantial, ranging between 10-30% of the “monetary sanctions” imposed or collected from any action or proceeding brought by the SEC or other agency.
Be The First To Notify The SEC
To receive the reward, the whistleblower must be the first to notify the SEC of the violation of the securities laws. Timing is critical.
The Act provides that only the first person or group of persons who provide information about a violation of the federal securities laws that leads to the successful recovery of monetary sanctions can receive the reward. The SEC will not consider your information if that information is known to the SEC, does not reflect your own knowledge or analysis, or is derived exclusively from an allegation made in a judicial or administrative hearing, governmental report, hearing, audit, or investigation, unless you are the source of the information.
If the whistleblower is first and the information provided is original and leads to the recovery of monetary sanctions by the SEC, the whistleblower will receive between 10-30% of the total recovery. The amount varies, depending on such factors as the significance of the information provided and the degree of assistance provided by the whistleblower. Congress decided to give whistleblowers a share of the recoveries that result from information they provide to give people a strong incentive to step forward and take the personal and professional risks involved in reporting violations of the securities laws.
Strong Whistleblower Protections: Confidentiality And Anti-Retaliation
In addition to providing a strong financial incentive to whistle blow, Congress wanted to provide strong protections to those who take the personal and professional risks involved in reporting violations of the securities laws.
The Act allows individuals who are retaliated against by their employers to file a lawsuit in federal court. Remedies that can be sought include reinstatement, double back pay with interest, as well as litigation costs, expert witness fees, and reasonable attorney’s fees.
The Act also includes strong provisions for confidentiality. The SEC cannot disclose any information, including information provided by a whistleblower, that can reveal the identity of a whistleblower, until the information is required to be disclosed to a defendant in a proceeding instituted by the government.
Additionally, Congress allowed whistleblowers to come forward anonymously, as long as the information is provided by an attorney. Therefore, the whistleblower’s identity may remain unknown even to the SEC until the time comes for the payment of a reward.
Experience Is Important
Bernstein Liebhard LLP is dedicated to providing experienced, dedicated, and aggressive representation for whistleblowers looking to report violations of the federal securities laws to the SEC. Since its inception, Bernstein Liebhard has represented individual and institutional investors in complex securities class actions and shareholder rights litigation. The Firm is a nationally recognized plaintiffs’ law firm that has recovered more than $3 billion on behalf its clients and the classes that it represented, and achieved significant corporate governance reforms. The whistleblower practice group which includes attorneys who have substantial experience fighting securities fraud will use their experience to assist you in blowing the whistle on those who violate the federal securities laws.
If you choose to blow the whistle on, among other things, violations of the federal securities laws, the attorneys at Bernstein Liebhard LLP will help you report the wrongdoing, and assist you in complying with any regulations adopted by the SEC under the Act. Contact Jeffrey M. Haber, Christian Siebott, James Weir or Laurence Hasson for more information.