The SEC Whistleblower Program rewards whistleblowers who submit tips to the SEC related to violations of federal securities laws. Whistleblowers submits complaints of violations to the SEC. The SEC investigates the complaint to determine whether to bring enforcement action against the accused violators. If the violator is penalized with a monetary sanction of over 1 million, the whistleblower can be awarded between 10% and 30% of the monetary sanction. Since 2012, the SEC has awarded more than $262 million to 53 whistleblowers.
The program prohibits companies from retaliating against a whistleblower. If the whistleblower faces retaliation like termination, he or she can file a civil lawsuit in a federal court for damages. A whistleblower who has been retaliated against may receive reinstatement, two times the amount of back pay, and compensation for litigation costs.
A whistleblower can also file a complaint anonymously. If he or she does, they must be represented by legal counsel. The whistleblower’s identity must be revealed prior to receiving the award.