Are you a due diligence expert who has discovered wrongdoing at a company? Before taking any action, please consult with us first. We’ll discuss your case with you and help you navigate the SEC’s Whistleblower process while protecting your rights and your anonymity.
How Can A Due Diligence Expert Become A Whistleblower?SEC whistleblowers aren’t always someone who is “on the inside” of a company. They can be outsiders who have access to company information with the means and ability to detect misconduct. Known as “due diligence,” it is the process of conducting a thorough investigation into a person, business, or specific transaction before proceeding. Due diligence enables individuals to identify potential risks, confirm essential information, and make well-informed decisions prior to entering into agreements or pursuing significant corporate actions.
Individuals with experience in due diligence recognize irregularities and potential violations before they cause problems. A due diligence expert who reports misconduct to the SEC as a whistleblower is a professional skilled in analyzing, assessing, and verifying evidence of compliance with financial, legal, or regulatory standards. This expert is often brought in to evaluate whether a company, investment, or individual has adhered to expected procedures, laws, or ethical norms. They are frequently utilized in the context of securities fraud, accounting irregularities, or investment misconduct.
Role And ResponsibilitiesIndividuals who understand and utilize due diligence have specific responsibilities for their work:
Because they work with complex company information, they are better able to detect and determine if misconduct has occurred.
The SEC’s Whistleblower Reporting ProcessThe SEC Whistleblower Program incentivizes such reports by offering monetary awards (10–30% of sanctions collected in cases leading to enforcement actions above $1 million). There is a specific process the SEC uses for due diligence experts to submit their information before they can be eligible to receive an award.
Whistleblowers, including due diligence experts, must present the alleged misconduct clearly, including all evidence, to ensure their claims are credible and actionable by the SEC.
Experts frequently consult or partner with experienced whistleblower attorneys to draft and submit thorough "Tip, Complaint, or Referral" (TCR) forms, which connect the technical facts to violations of securities law. Not only does this increase the chances of your information leading to an investigation, but it also provides anonymity and offers legal guidance along the way.
Common Misconduct AddressedSome common types of misconduct are:
The expert compiles documentation to assist the SEC in identifying malfeasance, potentially participating in interviews, providing testimony, or aiding the investigation. This is another area where an SEC Whistleblower attorney can instruct you to ensure that your information is presented in the best way possible for the SEC.
Importance of SEC InvestigationsThe SEC needs both credible information and accurate interpretations of data to begin an investigation. Without both, they may decide not to pursue your submission. An expert in due diligence can interpret and present their findings to the SEC for further investigation.
A due diligence expert, by virtue of training and experience, plays a vital role in surfacing corporate or investment misconduct for regulatory scrutiny. If their tip leads to an SEC enforcement action, they can qualify as a whistleblower and possibly receive a financial award.
How An SEC Whistleblower Attorney Can HelpFinding evidence of fraud or other misconduct should not be taken lightly. We can help you with:
Working with an SEC whistleblower attorney offers a due diligence expert the greatest chance for a successful report, ensuring the claim is compelling, and that the expert is legally protected throughout the process.