How The SEC Whistleblower Program Works

An SEC Whistleblower is a person that alerts the Securities and Exchange Commission about securities, stock or investment fraud. This includes insider trading, market manipulation, foreign bribery, false statements in financial filings, accounting fraud, fraud in offerings and any other type of securities fraud. A person can use the SEC whistleblower program if they are an expert analyst, an insider or whether they are personally affected by the fraud or not. This gives the SEC an opportunity to act on the information. The whistleblower’s first step should be to contact an SEC Whistleblower attorney.

 

The types of violations typically reported by whistleblowers include Ponzi schemes, Front running, accounting fraud, Pump-and-dump schemes, mutual fund fraud, insider trading, and the use of bribery to retain or obtain business. Anyone can become an SEC whistleblower. All they have to do is voluntarily give original information related to the possible violation of the federal securities laws whether such violation occurred in the past, is about to occur or is ongoing. The whistleblower doesn’t have to work for the company to provide the information. However, the information must result in the SEC taking successful action which results in financial sanctions in excess of $1 million.

 

People who report securities fraud are provided with several protections. The SEC whistleblower program has an anti-retaliation provision which protects whistleblower that are employees. The program also offers complete anonymity if the whistleblower is represented by counsel. Once the whistleblower provides signs and submits a completed Form TCR when they make their anonymous submission to the attorney that attorney can act on their behalf with the SEC.

 

People are encouraged to become securities whistleblowers because securities fraud costs investors an estimated $40 million annually in losses. Plus whistleblowers can receive 10% to 30% of the monies recovered if the information they provide leads to the recovery of $1 million or more. The whistleblower can receive more than 30% if its a significant case and the amount of assistance they provided. The Dodd-Frank SEC Whistleblower Program is an important SEC tool that has helped to uncover a vast number of fraudulent activities and brought the perpetrators of the fraud to justice.

 

If you are aware of securities fraud and want to participate in the Dodd-Frank SEC Whistleblower Program all you have to do is contact an experienced SEC Whistleblower lawyer. They will guide you through the necessary steps required for participation.

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