SEC Whistleblowers Report Original Information
The Securities and Exchange Commission’s whistleblower program provides a substantial reward to people who can bring them original information about securities law violations. But the definition of original can be tricky because it encompasses information that would otherwise be secret and information that is based on your independent analysis of the facts, even if they are otherwise public.
It’s absolutely vital to make sure your information is original, because if the SEC thinks it’s not, you aren’t eligible for an award. That award is an important incentive for whistleblowers to come forward, especially when they may face career consequences for reporting.
If you are aware of a violation of the federal securities laws, time is of the essence to file to help protect an award.What Is Original Information?
The Commission’s rules define “original information” as non-public information derived from independent knowledge or analysis. That means the information must not already be known to the Commission (unless you were indirectly the source) and not made known in the media, before Congress or other public venues like a court. Independent knowledge is the knowledge you acquire from private sources, like your employer’s internal communications.
Independent analysis is more complicated. Your independent analysis is your own analysis, including team efforts, examining, and evaluating information. That information may be publicly available, but your analysis must reveal information that is not generally known to the public.
Narrowing the Definition In September of 2020, the SEC added to the definition of independent analysis. Rules published then say that independent analysis must provide evaluation, insight or assessment beyond what would be reasonably apparent to the SEC on its own.
To determine whether information meets this definition, the Commission looks at whether the whistleblower’s conclusions are based on multiple sources; whether those sources include ones that are not easily accessible to the public without specialized knowledge, effort or cost; and whether, taken together, they suggest a securities law violation that any individual source does not suggest.New Clarity
While this change narrows the definition of independent analysis slightly, it also provides clarity that SEC whistleblowers may welcome. Understanding what the SEC is looking for helps whistleblowers maximize their chances of a successful claim on a financial award later on. There are many rules like this in the SEC whistleblower program, and some are important for making sure your claim is successful. An SEC whistleblower attorney can guide you through that legal maze and help you get the best possible financial award.
Silver Law and the Law Firm of David R. Chase can help. David Chase is a former SEC enforcement attorney who understands how the agency builds its cases; Scott Silver understands the SEC whistleblower program well, having written a well-regarded outline for lawyers and whistleblowers. If you’d like to talk to an experienced career securities lawyer about the best way to disclose your information, contact the firms for a consultation. You can send an email or call toll-free at 800.975.4345.