Can a Cybersecurity Disclosure Lead to an SEC Whistleblower Award?
Cybersecurity is crucial in financial markets, and when a corporation or individual commits cybersecurity fraud of any kind, investors are at risk.
For this reason, the U.S. Securities and Exchange Commission (SEC) encourages those who have information about cybersecurity violations to come forward and report their findings to the SEC and potentially win a whistleblower award for their disclosure.
Below, we examine why reporting cybersecurity violations and risks is important and the requirements your tip will need to meet in order to qualify for a whistleblower award.
The Importance of Cybersecurity Disclosures
There are many different types of cybersecurity issues that affect investors, consumers and the public. Breaches in security, such as hacking, are among the biggest risks and those that occur most frequently.
A cybersecurity breach in and of itself isn’t a violation of the SEC’s regulations, but when corporations fail to disclose this information to affected consumers and potential investors, they are violating federal securities laws.
Criteria for a Whistleblower Award
The SEC relies on whistleblowers who discover such information to report their tips so the SEC can take action. But there is more to winning a whistleblower award than reporting suspected securities violations. To win a reward, your tip needs to be given voluntarily and be original, which means the information you have came from a source that hasn’t already been made public.
Additionally, the SEC needs to be able to take enforceable actions against the violator in question and recover sanctions that exceed $1 million for you to be eligible for an award. If you aren’t sure whether your cybersecurity disclosure warrants the pursuit of a whistleblower reward, consult your attorney.
Contact an SEC Whistleblower Lawyer
To learn more about cybersecurity fraud and how to become an award-winning whistleblower, reach out to an experienced SEC whistleblower lawyer at Meissner Associates. Schedule your confidential tip review by giving our office a call at 1-866-764-3100 or fill out the secure contact form we have provided at the bottom of this page.