On July 30, 2021, three months after being sworn into office following his nomination by President Biden, U.S. Securities and Exchange Commissioner (“SEC”) Chair voiced unequivocal support for whistleblowers. Commissioner Gensler said, “Whistleblowers provide a critical public service and duty to our nation. The tips, complaints, and referrals that whistleblowers provide are crucial to the Securities and Exchange Commission as we enforce the rules of the road for our capital markets.” He reported that so far, the SEC’s Office of the Whistleblower has paid out more than $900 million to approximately 180 whistleblowers.
SEC Chair Gensler mentioned that he would like to “continue to reduce processing times in SEC whistleblower award determinations.” He also said, “I have asked staff to examine whether and how the program could be further strengthened to ensure that misconduct within the remit of the SEC is identified, addressed, and stopped. We must ensure that whistleblowers are empowered to come forward when they see misbehavior; that they are appropriately compensated according to the framework established by Congress; and that those who report wrongdoing are protected from retaliation.”
Established by the Dodd-Frank Act of 2010, the SEC’s Whistleblower Program provides monetary awards to persons who assist the SEC in the enforcement of U.S. securities laws. Whistleblowers may allege a wide variety of violations including but not limited to allegations of: insider trading; Ponzi scheme; theft or misappropriation of funds or securities; manipulation of a security’s price or volume; fraudulent or unregistered securities offering; false or misleading statements about a company; bribery or improper payments to foreign officials; abusive naked short selling; fraudulent conduct associated with municipal securities transactions or public pension plans; and fraudulent conduct involving cryptocurrencies.
To become eligible for an award, whistleblowers must submit their information to the SEC. If more than $1 million in sanctions is ordered based on the whistleblower’s information, the whistleblower can then apply for an award and may be eligible to receive between 10-30% of the amount the SEC recovers based on the whistleblower’s information.
If you have information related to a potential violation of securities laws, you might qualify for such an award under the SEC Whistleblower Program. Contact our experienced whistleblower lawyers to discuss your potential claim today!
