SEC Whistleblower Award Criteria

Whether you’re a company insider or an outsider who’s discovered securities fraud through independent analysis, stepping forward and becoming a whistleblower is a big deal. You’re probably worried because it seems like there’s a lot at stake—and there definitely is.

Fortunately, not only does the Dodd-Frank Act provide you with a number of legal protections that prevent retaliation, but the whistleblower award you stand to receive from the Securities and Exchange Commission (SEC) is also very much worth the hassle.

However, in order to claim your reward, your tip will need to meet all four points of the SEC whistleblower award criteria:

1. Your Whistleblower Tip Must Be Voluntarily Provided

The SEC will not reward you for your information if you were forced or required to provide it. The decision to submit your whistleblower tip to the SEC must be 100 percent voluntary.

This means that if the information has already been requested or demanded by a government agency or official conducting an investigation, inspection, or examination, your tip will not count as voluntary.

However, a caveat applies if the request was made of a company or entity that has not cooperated and a whistleblower then comes forward to provide the information. Meeting this award criterion under these circumstances can be a case-by-case basis, so it’s essential that you work with an experienced SEC whistleblower attorney.

2. The Information You Provide Must Be Original

The information and evidence included in your whistleblower tip must be original. This means that your submission must be the first time the SEC has learned of the information, so it’s important not to hesitate. Doing so could result in another whistleblower tipping the SEC off first.

Another element of this SEC whistleblower award criterion is that your information must not be derived from publicly available sources. The evidence it derives from could take many forms, however, such as personal discussions with insiders, direct experiences, or observation and analysis.

3. A Successful SEC Enforcement Action Must Result

It’s not enough that the SEC simply launches an investigation based on your whistleblower tip: A successful enforcement action must be the end result of the investigation in order for you to collect a whistleblower award.

It’s important to note that your whistleblower tip could contribute to resolving an investigation already in progress. As long as your information helps to bring about the enforcement action, you could be rewarded.

4. Over $1,000,000 in Sanctions Must Be Collected

Even if the SEC enforcement action is successful, you’ll only be eligible for a whistleblower award if the sanctions collected exceed $1,000,000.

If they do, you could receive between 10 and 30 percent of the total sanctions collected.

Find Out if Your Tip Meets the SEC’s Award Criteria

Have you encountered securities fraud but aren’t sure if your information will meet the SEC whistleblower award criteria? Meissner Associates can help. Get a free, confidential tip evaluation by completing the form below or by calling 1-866-764-3100.





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