If you know of a company or corporation that is in violation of federal security laws, you have a chance to collect between 10 and 30 percent of the total fines if you give information to the government that leads to legal action. Many people are interested in collecting the reward but have a range of questions they would like for someone to answer.
Moving forward and reporting a company for violating these laws can feel intimidating, especially if you fear retaliation. Learning as much as you can about the SEC whistleblower system and how it can protect you is smart. It lets you move forward with confidence and know what to expect along the way.
SEC Whistleblower Explained
Learning about the SEC whistleblower program is a good place to start when your goal is to decide what path makes sense for you. The information in this section paints a clear picture, and you will have no trouble deciding what to do. Implemented by Congress, the whistleblower system exists to reward those who report violations of federal security laws.
The system also defines who is eligible to collect compensation and what the information must contain before the whistleblower can receive payment. Under the SEC whistleblower program, regulations list the legal penalties an employer can face for trying to discourage someone from reporting violations. The system has stipulations in place that highlight the penalties an employer can face for retaliating against an employee for giving information to the government.
At this point, you are likely wondering who qualifies as a whistleblower under the SEC. Reviewing this guide helps you understand when you qualify and when you can expect compensation for your report. What you are about to learn also helps you decide what you should do to increase your odds of filing a successful report. As long as you supply the SEC with relevant information about a violation, you are a whistleblower.
Before you can get paid, the information you provide must lead to legal action against the company that committed the violation. Some people think any relevant tip about a violation can earn them a part of the reward, but that is not the case. The information you offer must be new, meaning you have to tell the SEC something they did not already know. If you work for a company and know about security violations, taking action could be the best choice you ever make.
If you are like other people, you are curious about the types of violations that qualify under the SEC whistleblower program. Reviewing the types of fraud covered by the system is a great way to learn what path you should take, preventing you from wasting time on issues that are unlikely to generate attention. Also, you could discover that actions you would have otherwise overlooked fall within the definition.
The SEC welcomes reports about Ponzi and pyramid schemes, and you are free to report the theft of securities. If a company manipulates the price of a security or engages in insider trading, the people in charge of the SEC would like to know about it. Companies that release misleading information about their securities are also a target of the SEC. You can report anyone who tries bribing foreign officials in an attempt to alter the value of securities.
Rewards and Compensation
If you have submitted information that led to action by the SEC, you need to know how to collect your reward. You would otherwise lose your shot at collecting the money to which you are entitled, and you don’t want to face that problem. You must fill out the application form and mail it to the office of the whistleblower to get your money. Some people try rushing through the process to finish it as quickly as possible.
If you don’t want to lose your opportunity to collect a reward, don’t make that mistake. Take your time and ensure you complete each part of the form the right way. As long as you take your time and review the report before submitting it, you will have nothing about which to worry.
Protection From Retaliation
Employees will often want to report a violation but refuse because they fear retaliation. They are worried that the company for which they work will fire, demote or harass them for coming forward, which is a valid concern. But you should know that the SEC whistleblower system has put protective measures in place to safeguard you from that issue.
You can take legal action and seek damages if your employer retaliates against you for reporting information to the SEC. In addition to preventing retaliation, the SEC also stops employers from discouraging staff members from filing complaints. If you believe the company for which you work is trying to stop you from reporting a violation, you can contact the Department of Labor for more information.
Collecting Evidence of Retaliation
You need to know what steps you should take after filing a report if you would like to avoid retaliation. Proving retaliation is not always easy, but you can do it if you use a proven process and maintain your composure. Check the laws in your state to see if you are allowed to record audio at work or over the phone without informing the other person.
If you are, you can use audio recordings as evidence of retaliation. Make a note of the dates and times of any retaliation as well as any witnesses who were present at the time. You can even hire a private investigator to review your case and help you collect the evidence you need to protect your rights. A skilled investigator will gather information from out of sight and do what it takes to reveal the truth, and you will increase your chance of success.
Why the Government Started the Whistleblower System
You are probably asking why the government implemented the SEC whistleblower system in the first place. The aim is to ensure fair trading practices and to let investors know what they are buying before they move forward. Fraud related to securities can devastate corporations and impact the economy in ways most people don’t suspect.
As a result of the possible fallout, preventing security fraud benefits the public and maintains a balanced economy, creating a win-win situation. The SEC whistleblower program protects those who report fraud from retaliation, allowing them to come forward with peace of mind.
The Benefits of Remaining Anonymous
Remaining anonymous gives those who report fraud a range of fantastic benefits. Even though the law prohibits employers from retaliating against those who report crimes to the SEC, avoiding negative fallout is often the most desirable path.
Remaining anonymous gives you the chance to do the right thing and collect your reward without anyone knowing what you did. If you would like to file an anonymous report, you must do so with the help of an attorney. Your attorney will submit the report and pass your reward on to you, and the SEC won’t even know who you are.
Confidentiality Agreement Exceptions
If you report fraud or a related offense to your company’s human resource department, they might ask you to sign a confidentiality agreement. Some companies even require employees to sign such agreements at the start of their employment, and management will claim the agreement stops employees from reporting SEC violations.
Luckily, confidentiality agreements that try stopping employees from contacting the SEC are not valid, and those who have signed them can still come forward with information. You can call the SEC for more details if you have signed such an agreement and want more information on how to proceed.
No legal contract can stop you from bringing fraud to the attention of the government, so you can still follow steps to claim your reward as long as you have relevant details. This exception exists to prevent companies from taking advantage of confidentiality agreements as a way to hide illegal actions from the government.
The Importance of Working with an Experienced Lawyer
You might think moving forward on your own is enough to get the outcome you want, but that is not always the wise choice. Having an attorney on your side is the best bet when you want to improve your odds of success and protect yourself from retaliation.
Your advocate can give you SEC tips and show you what steps are right for your goals and current situation. The legal expert you hire will protect your rights and keep your interests in mind from start to finish, and you will be pleased with your decision. You and your legal advisor can work together to find the best way to reach your desired outcome.
The government implemented the SEC whistleblower program to give employees the chance to report fraud and other financial crimes without fear of retaliation. Those who provide accurate information that leads to action by the SEC can get up to 30 percent of the damages recovered.
Although the government provides information and offers protection, those who want to enjoy the best results must speak with a qualified legal representative before moving forward. If you have facts about a crime you would like to report, reach out to a caring legal expert the first chance you get, and you will be happy with the outcome.