SEC Whistleblower Program

The SEC Whistleblower Program rewards whistleblowers who submit tips to the SEC related to violations of federal securities laws.

Whistleblowers submit information regarding a possible securities violation directly to the SEC. The SEC then 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, such as harassment or 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.

A copy of the SEC Enforcement Manual can be found here.

A copy of the SEC Whistleblower Program Rules can be found here.