Under the SEC Whistleblower Program, a whistleblower may be entitled to additional compensation if he or she reports a violation internally before submitting the information to the SEC. The original justification for this requirement was that internal reporting mechanisms tend to be effective at detecting and stopping fraud. Unfortunately, however, recent SEC whistleblower awards demonstrate the fact that employees who attempt to report fraud internally often face retaliation from their employers. In fact, most of the whistleblowers who have received awards in 2020 suffered retaliation after raising fraud concerns internally. Recent examples include:
- On February 28, 2020, the SEC awarded approximately $7 million to a whistleblower. In its order, the SEC stated that the whistleblower suffered hardships after attempting to report the fraudulent behavior internally.
- On March 30, 2020, the SEC awarded approximately $450,000 to a whistleblower. The SEC noted in its order that the whistleblower suffered unique hardships as a result of reporting the information internally.
- On April 3, 2020, the SEC awarded approximately $2 million to a whistleblower. The order in the case noted that the whistleblower received implied threats and suffered hardships as a result of reporting the information internally.
- On April 16, 2020, the SEC awarded approximately $27 million to a whistleblower. In justifying an upward adjustment of the whistleblower’s award, the SEC order stated that the whistleblower repeatedly and strenuously raised concerns internally before reporting the information to the SEC.
- On April 20, 2020, the SEC awarded approximately $5 million to a whistleblower. In justifying an upward adjustment of the whistleblower’s award, the SEC order noted that the whistleblower was terminated soon after raising concerns internally about the fraudulent conduct.
About the SEC Whistleblower Program
Since its inception, the SEC whistleblower program has paid out over $400 million to whistleblowers. And as is demonstrated by the awards discussed above, the compensation received by whistleblowers is often substantial. In order to become a whistleblower, one must meet the following requirements:
- Have original information about securities fraud.
- Voluntarily provide this information to the SEC.
- The information must result in a successful SEC enforcement action.
- The monetary sanctions collected in the enforcement action must exceed $1 million. Whistleblowers are eligible for an award of up to 30% of the sanctions collected in a successful enforcement action.
Contact Our SEC Whistleblower Attorney Today
If you have information to share with the SEC concerning financial fraud, you may be entitled to a monetary award. However, in order to ensure that you follow all of the SEC’s reporting procedures, you need an experienced SEC whistleblower attorney on your side. At Newman & Shapiro, we understand the courage it takes to become a whistleblower. Therefore, when we take on your case, we’ll do everything in our power to help you obtain the maximum reward possible while maintaining your confidentiality. Please contact us today for a consultation.