How to Become a SEC Whistleblower

File SEC Complaints How to Become a SEC Whistleblower

What It Means to Be a SEC Whistleblower

Life is not always fair. Sometimes, those who try to do good are punished instead of rewarded. Luckily, that's not the case for SEC whistleblowers. Protections and awards go out to those who take advantage of the SEC Whistleblower Program.

The SEC Whistleblower Program is giving out record amounts of cash to whistleblowers who provide them with timely information. According to a press release from the SEC, they've handed out more than $500 million in the 2021 fiscal year alone.

SEC whistleblowers get a percentage of the money the SEC recovers, so it's worthwhile to speak out if something is wrong. But navigating the complaint process can be difficult. Potential whistleblowers need to make sure they're doing everything right to maximize the benefit of the SEC Whistleblower Program.

What Kinds of Information Do SEC Whistleblowers Provide?

According to the SEC, the information they're looking for is very specific. The SEC may have a lot of tips coming in, but they don't have the resources to investigate every single one. The more timely the information, the more likely the SEC will be able to look into it.

The SEC also needs details. Names, dates, and specific examples of where there may be evidence of fraud will help the SEC determine if the tip is credible and actionable. Although the SEC is looking for any information related to securities fraud, they're not set up to handle all financial crimes. If a tip warrants, the SEC will refer complainants to other law enforcement agencies.

Some of the financial crimes that do fall under the SEC's jurisdiction include: 

  • Insider trading
  • Theft of securities 
  • Price or volume manipulation
  • False statements about a company, for example misleading information in SEC filings 
  • Bribery of foreign officials 
  • Fraud involving pension plans 
  • Any type of Ponzi or pyramid scheme, including so-called 'high-yield' investment programs
  • Fraud involving brokers
  • All other types of fraud or illegal manipulation of securities

How Much is the SEC Whistleblower Reward?

Anyone who has information of the kind included in the previous section can apply to the SEC Whistleblower Program.

  • When tips are accepted, investigated, and acted on by the SEC, the whistleblower involved is eligible for a reward.

  • The whistleblower cannot be punished by their employer for providing information to the SEC.

  • The amount of the reward depends on the amount of money recovered by the SEC. Whistleblowers are entitled to anywhere between 10% and 30% of the recovered money, meaning the bigger the fraud, the bigger the reward for reporting. 

However, getting the reward isn't as easy as just submitting a tip. Once the tip is submitted, the SEC may or may not act on it. If they do, then they'll post the case on the Notices of Covered Action section of their website. A whistleblower who believes their tip is the one that led to a case needs to submit additional forms to the SEC to be eligible for the reward. 

Rewards are only given if the SEC recuperates more than $1 million from the case. Whistleblowers need to stay vigilant, and fill out all necessary forms correctly, and in a timely manner to receive their reward.

How to Become an SEC Whistleblower

The SEC is looking for timely, original information from whistleblowers that is provided voluntarilyThat means the whistleblower is giving out the information before the SEC or another law enforcement agency came asking for it. In essence, they're not looking for something too old to act on, or information about fraud they're already on to. If you have information that fits that criteria, here is how you can become an SEC whistleblower on your own.

Submitting the tipThere are two ways to submit a tip:

  1. Online
  2. By mail

All tips should be submitted using the Tips, Complaints, and Referrals (TCR) form. Make sure to answer 'yes' to the questions about being involved in the SEC Whistleblower Program. By declaring yourself a whistleblower, you could be eligible for a reward, and your employer cannot retaliate. DoNotPay can help navigate these forms. Filling them out incorrectly can have dire consequences. Not only will the whistleblower be ineligible for the reward, but they may be fired or demoted at work if they don't apply for the proper whistleblower protections.    

Swearing under penalty of perjuryThe SEC requires that all information be sworn to be true under penalty of perjury. The online and hard copy forms contain a section for this, and need to be completed in order for a whistleblower to receive an award. There are time limits to filing the declaration, and missing them can again make an SEC whistleblower ineligible for the reward. Again, DoNotPay can help with getting all documents to the SEC at the right time.

Common Problems with the SEC Whistleblower Program 

Filing the tip is just the beginning when it comes to the SEC Whistleblower Program. Whistleblowers have to make sure all their paperwork is in order. Then, they have to keep an eye out for their case. 

If and when information leads to the SEC opening a case against a company, the SEC whistleblower then has to file more forms to prove it was their tip that started things off. DoNotPay can help from beginning to end.

Becoming an SEC Whistleblower using DoNotPay

If you want to file an SEC complaint but don't know where to start, DoNotPay has you covered. Create your own cancellation letter in 3 easy steps:

  1. Search SEC Complaint on DoNotPay.
  2. Answer basic questions about your broker and complaint (you can also use your automatically generated complaint template).
  3. DoNotPay will automatically run a bot to work on your behalf and securely fill out your SEC complaint form.

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