SEC Whistleblower Lawyer

In 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act to address the rampant fraud occurring in our country’s financial system.

Under Dodd-Frank, the SEC developed the SEC Whistleblower Program through the Office of the Whistleblower, which allows eligible whistleblowers receive significant monetary awards for tips that lead to prosecution or enforcement actions.

The SEC Whistleblower Program affords employment protections to whistleblowers and the ability to report anonymously.

Fob James Law Firm has extensive experience representing SEC whistleblowers. What gets a tip taken seriously is not who you know at the Commission. It is whether the submission identifies a specific violation, is supported by documents, and gives investigators somewhere to start. That is the work we do before anything is filed.

If you have knowledge of a fraudulent practice occurring within or by a financial institution, contact Fob James Law Firm today for a free and confidential consultation.

The Mistake That Costs Whistleblowers Their Protection

Most people do the decent thing first. They raise it with a supervisor, or compliance, or legal, and they wait. That instinct is the single most dangerous move available to a whistleblower, and the reason is a Supreme Court case most people have never heard of.

In Digital Realty Trust, Inc. v. Somers, 583 U.S. 149 (2018), the Court held that Dodd-Frank’s anti-retaliation protection covers only people who report to the SEC. Report internally and nowhere else, get fired for it, and Dodd-Frank does not protect you, no matter how right you were. The protection attaches to the act of telling the Commission, not to the act of speaking up.

Section 806 of the Sarbanes-Oxley Act partially fills that gap for employees of public companies who report internally, but it runs on its own much shorter clock and is filed with OSHA rather than the SEC. The practical takeaway is simple: if you are considering raising something internally, talk to a lawyer first, because the order in which you do things determines which protections you keep.

Where Dodd-Frank does apply, its remedy has teeth. Section 21F(h) gives a private right of action including double back pay. And separately, Rule 21F-17 bars anyone from taking any action to impede you from contacting the SEC, which is why a severance agreement or NDA cannot lawfully be used to buy your silence about securities violations.

What Are The Eligibility Rules Of The Whistleblower Program?

Not every tip qualifies under the program. According to the SEC, the key eligibility factors include the following:

• The information must be original, something not known to the SEC.
• The tip must be provided voluntarily, before the agency or financial institution has reported the information.
• The whistleblower’s submission must lead to a successful enforcement action resulting in monetary sanctions exceeding $1 million.

How Do I Submit A Whistleblower Tip To The SEC?

In order to qualify as a whisteblower, you must first submit a Form TCR to the Office of Whistleblower.

The most common method of submitting a tip to the SEC is by filling out the form online through the SEC’s website. You also have the option of mailing or faxing a Form TCR to the Office of Whistleblower.

Importantly, the information you submit to the SEC is under a penalty of perjury. This means that if you misrepresent a material fact to the SEC, you could be prosecuted. For this reason, we recommend that you consult with a whistleblower attorney before submitting a Form TCR to the SEC.

The SEC receives thousands upon thousands of tips every year. It goes without saying that the SEC is looking for the most qualified whistleblowers and meaningful tips.

Working with a whistleblower attorney at the Fob James Law Firm is advantageous as we assist in drafting the whistleblower complaint, collecting evidence, and presenting the complaint to the SEC. We have handled securities and financial fraud litigation, including a nationwide class action against a major retirement plan provider, and we know what a submission needs to contain before it is worth an investigator’s time.

Can I Submit A Tip To The SEC Anonymously?

Yes, you can submit a tip the SEC without revealing your identity provided that you are represented by an attorney. This is another advantage of consulting with the Fob James Law Firm. We can help you determine whether you should submit your tip anonymously.

However, even if you choose to reveal your identify the SEC, Dodd-Frank protects the identity of whistleblowers. From our experience, the SEC goes to great lengths to protect the identity of its whistleblowers.

Who Can Be A SEC Whistleblower?

Anyone can.

What Types Of Fraud Can Be Reported To The SEC?

There is virtually no limit to the types of fraud that can be reported to the SEC. Fraud evolves as fraudsters look for new ways to defraud victims and bypass regulators. Below is a list of common types of fraud that whistleblowers report to the SEC:

• Fraudulent sales practices by broker-dealers and financial advisory forms
• Ponzi schemes
• Trading fraud
• Accounting fraud
• Outright theft from investors
• Pump-and-dump schemes and stock manipulation
• Insider trading

How Much Compensation Does A SEC Whistleblower Get?

The amount of compensation a whistleblower is awarded is determined by the SEC. The SEC does not publish a formula or disclose its methodology.

However, based on prior awards, it appears the SEC awards anywhere from 10-30% of the total penalty resulting from an enforcement action. The money can be quite substantial since enforcement actions often result in penalties of tens of millions of dollars and sometimes a lot more.

For scale, these are awards the SEC has paid to whistleblowers program-wide. They are not results obtained by this firm, and they are not a prediction of what any individual claim is worth:

• $110 million dollars
• $50 million dollars
• $50 million dollars
• $50 million dollars
• $39 million dollars
• $14 million dollars
• $13 million dollars

The Deadlines That End SEC Whistleblower Claims

There is no single statute of limitations here. There are several clocks, and they start at different moments.

Form TCR, 30 days. Under Rule 21F-9, if you first give the SEC information some other way, you must follow it with a signed Form TCR within 30 days, or within 30 days of learning that the requirement exists. There is a wrinkle worth knowing: once you are represented by counsel, you are on constructive notice of the filing requirement, which means retaining a lawyer starts that clock whether you know it or not. Miss it and you can be ineligible for an award on information the SEC already used.

Notice of Covered Action, 90 days. When an enforcement action results in sanctions over $1 million, the SEC posts a Notice of Covered Action. From that posting you have 90 calendar days to file your award claim. Nobody calls to remind you. If you tipped years earlier and stopped watching, the notice can come and go without you.

Retaliation claims. If you were fired, demoted, or pushed out, the deadline depends on which statute protects you, and per Digital Realty that depends on whether you reported to the SEC. Sarbanes-Oxley claims run on a notably short fuse and are filed with OSHA. This is the part that should be sorted out in a consultation, not discovered afterward.

Retirement Plan and Managed Account Fraud

One area we know well is misconduct inside retirement plan providers. Investment advisers are SEC regulated and owe fiduciary duties to the clients whose savings they manage. When a provider’s advisors are quietly compensated for moving client money into the provider’s own higher fee products, or when the only recommendation an advisor ever makes happens to be the most profitable one for their employer, that is the kind of conduct the SEC Whistleblower Program exists to surface.

This is not theoretical for our firm. In 2023 we filed a nationwide class action against Empower Retirement on behalf of government employees with deferred compensation plans and private IRA holders. We have written in detail about the alleged sales practices at issue in the Empower managed account matter and the Vanguard managed account matter. If you worked inside a plan provider and saw how those decisions were actually made, you know something regulators cannot see from the outside.

Finding The Best Whistleblower Lawyer

To prevail in a SEC whistleblower action and obtain the financial compensation you deserve, your lawyer must build a persuasive case supported by documentation and evidence.

Choosing a law firm that will fight for your rights is critical. 

You need a whistleblower attorney who crafts a customized strategy for you and the unique details of your claim.

The experienced whistleblower attorneys of the Fob James Law Firm understand the challenges you are facing.

Your livelihood and anonymity are of the upmost importance to us.

You don’t have to fight this battle alone.

When you trust us to assist you, your lawyer will work directly with you. In fact, we don’t even use case managers.

This allows our whistleblower attorneys to provide the dedicated focus your case deserves. Don’t risk your future by trying to navigate this complex area of the law on your own.

Contact our firm online or give us a call at (866) 837-1010 today to schedule a free consultation with whistleblower lawyer.