The SEC Whistleblower Law has real teeth because whistleblowers are incentivized to report corporate and securities fraud: A whistleblower can earn substantial whistleblower rewards if she voluntarily provide information to the Securities and Exchange Commission (SEC) leading to the successful prosecution of securities law violations. Whistleblowers who report securities violations, including violations of the Foreign Corrupt Practices Act (FCPA), that result in monetary sanctions greater than $1 million, may receive between 10 and 30 percent of the total recovery.
We know that 10% is the minimum amount. A natural question then is when does a whistleblower qualify to earn 30% as a cash reward? The amount of the cash reward a whistleblower earns is at the near complete discretion of the SEC and it would not be surprising if the SEC promulgated more precise regulations in the future to better guide whistleblowers. This section of the website offers information on the types of information that a whistleblower can provide to the SEC to aid in maximizing a cash reward and also information on how that information can be presented.
Two points need to be reiterated at the outset:
SEC whistleblower rewards are generally only awarded to the first whistleblower to file
If a SEC Whistleblower files second, then probabilities are extremely high that the whistleblower will not share in any SEC whistleblower reward. Certainly, circumstances exist where a whistleblower files second and his information is so original and unique that he has at least an argument that he should share in any cash reward. These circumstances may be rare however and the general rule is that a whistleblower needs to file first with the SEC to have the strongest chance of receiving a cash reward.
An experienced whistleblower lawyer can aid in the speed of filing and the quality of the filing itself
Where does a whistleblower file? What does a whistleblower file? Is the information known to a whistleblower actionable? How does a whistleblower communicate with the SEC after a filing? An experienced whistleblower attorney can address these questions and others promptly. The initial consultation is free. A whistleblower attorney works generally on a contingency basis, so the attorney only gets paid from any cash reward should one be forthcoming. Importantly, a whistleblower attorney knows how to navigate the system and can answer any questions you may have. Equally importantly, a whistleblower lawyer can protect your anonymity until a cash reward is pending.