Former SEC Prosecutor
and Wall Street Defense Counsel
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provided for the possibility of significant awards for individuals who provide information of corporate misconduct. While these whistleblower awards can be significant, they are also subject to very specific requirements. If the information provided does not meet these requirements, an individual providing that information will not be eligible for an award.Requirements
Under the Dodd-Frank Act, to be eligible for a whistleblower award, the information provided to the Securities and Exchange Commission (SEC) must be original, which is defined as being:
Independent knowledge is defined as factual information that is not derived from publicly available sources that is gained from the whistleblower’s experiences, communications and observations in his or her business or social interactions. Independent analysis means the whistleblower’s own analysis, whether done alone or in combination with other people. While both independent knowledge and independent analysis are defined under the Dodd-Frank Act, what these terms mean are still subject to judicial interpretation.
The SEC will not consider information provided to be derived from a whistleblower’s independent knowledge or analysis under the following circumstances:
The awards for whistleblowers are intended to provide incentive for individuals with knowledge of corporate misconduct to communicate that information. By providing this information to the SEC, innocent investors can be protected. If you would like more information about the whistleblower program or the protections afforded to investors, contact experienced securities law attorneys at the Silver Law Group today.