SEC Whistleblower Claims

Securities Fraud Attorneys Representing Individuals Nationwide

For civil enforcement of the federal securities laws, the Securities and Exchange Commission (SEC) relies on assistance and information from whistleblowers who know about possible violations. Often, these individuals help the SEC identify and investigate fraud and other problems earlier than it might have discovered them otherwise. In other situations, an instance of fraud might never have been exposed without the assistance of a whistleblower. This allows the SEC to minimize harm to investors and quickly hold responsible those who participate in illegal securities conduct. If you are considering reporting a securities law violation either within your company or to the SEC, it is important to consult an SEC whistleblower lawyer who can help you seek to maximize your award and minimize the possibility of employer retaliation. At Silver Law Group / Law Firm of David R. Chase, PA, we are experienced litigators with a thorough knowledge of whistleblower rules and protections.

Bringing an SEC Whistleblower Claim

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains some of the strongest whistleblower protection provisions of all the whistleblower laws in the U.S. Section 922 authorizes the SEC to provide monetary incentives to individuals who provide original information that leads to a successful SEC enforcement action or substantially aids in an existing enforcement action. The whistleblower can act alone or with others.

Many different violations can give rise to a whistleblower claim, including insider trading, fraud, and theft of funds. In order to be considered a “possible violation” under the law, the information should show that there is a connection to some securities law violation. The information must concern violations of the federal securities laws, not state securities laws.

The information must be provided voluntarily by the whistleblower. In other words, to obtain an award, the information cannot have been provided because it was requested by the SEC or another authority. Moreover, the information must not be known by the SEC. You can submit it anonymously through an SEC whistleblower attorney.

Over $1 million in sanctions must be ordered in the enforcement action that ensues from the information given for an award to be granted. The award will be between 10% and 30% of the sanctions. The award percentage may be increased based on the significance of the information given, the ultimate success of the proceedings against the wrongdoers, the extent of the assistance provided, the SEC's law enforcement interest in deterrence, and whether the whistleblower participated in internal compliance systems by reporting the violations through internal procedures before or at the same time as reporting to the SEC. The award percentage may be reduced if the whistleblower participated in culpable conduct, unreasonably delayed making a report, or interfered with his or her company's internal procedures, such as by making false reports.

Holding an Employer Accountable for Retaliation

As a whistleblower, you have a private right of action under Dodd-Frank if your employer violates the whistleblower anti-retaliation provisions. This means you can bypass the OSHA administrative procedures that were required under Sarbanes-Oxley. Remedies if you successfully sue may include reinstatement, double back pay, fees, and costs. You need to bring this claim within six years of the retaliatory incident or three years after you know facts material to your claim. Unlike Sarbanes-Oxley, Dodd-Frank invalidates pre-dispute arbitration agreements concerning whistleblower retaliation claims.

Circuit courts are split on whether protection is limited to people who report misconduct to the SEC, as opposed to making an internal report. A Second Circuit decision held that the anti-retaliation provisions in Dodd-Frank are not limited to those who report to the SEC. In this court’s view, they also protect people who make internal reports to their own employers. This decision conflicts with an earlier Fifth Circuit decision, which held that an employee was not protected under the whistleblower anti-retaliation provisions because he did not provide information related to a securities laws violation to the SEC. It may be crucial to consult with a knowledgeable attorney who can advise you on how to proceed with your whistleblower claim, while also protecting your employment.

Consult an Experienced SEC Whistleblower Lawyer

At Silver Law Group / Law Firm of David R. Chase, PA, our SEC whistleblower attorneys help whistleblowers pursue the awards that they deserve while also trying to shield them from termination, demotion, suspension, harassment, and other forms of employer retaliation. We represent whistleblowers across the nation. Our managing partner Scott L. Silver authored a widely acclaimed outline on the Whistleblower Program, which we provide for free to anyone upon request. Call us at (800) 975-4345 or through our online form for a free consultation with a securities fraud attorney.