SEC Whistleblower Program

The Dodd-Frank Act and the Sarbanes-Oxley Act created and strengthened the whistleblower program of the Securities & Exchange Commission (SEC). The SEC, jointly with the Department of Justice, also investigates violations of the Federal Corrupt Practices Act committed by companies engaging in bribery in foreign countries. The SEC Whistleblower Program has received over 6500 tips during its relatively short life. The SEC is extremely interested in original information or analysis from corporate insiders regarding:

  • False or deceptive corporate disclosures;
  • Fraudulent or unregistered securities offerings;
  • Insider trading;
  • Illegal practices in foreign jurisdictions, including bribery of foreign officials; and
  • All other types of securities fraud.

During fiscal year 2013, the Office of the Whistleblower at the SEC paid whistleblowers over $14 million dollars for their efforts in stopping ongoing frauds.

Examples

In October 2013, the SEC awarded over $150,000 to a whistleblower whose tips concerned a securities scheme that defrauded investors and $14 million to another whistleblower whose information resulted in the recovery of substantial investor funds.

In December 2012, the CEO of a sham hedge fund pleaded guilty to wire fraud. Among many false and deceptive statements, the CEO lied about his education, prior work experience and corporate partners of the fund. Three whistleblowers who alerted the United States to the fraud are expected to receive over $125,000 for their information.

In August 2012, the SEC awarded a whistleblower $50,000 for information that helped the SEC investigate and stop a multi-million dollar securities fraud.