People who are considering reporting their employer for securities violations under the SEC Whistleblower Program know reporting the possible violations is the right thing to do, yet they still hesitate. It’s difficult to turn in co-workers or supervisors who may also be friends. It’s even more difficult to utilize a company’s own internal reporting system, however, the SEC suggests that people do, unless they have a very good reason not to, such as a fear of retaliation. Employees who utilize their company’s internal reporting system have 120 days to report the information to the SEC: otherwise, it’s not original information.
Employees also hesitate to inform the SEC of possible violations because they initially condoned the act and they fear the SEC will say that they participated in the fraud. In cases like this, individuals should consult an attorney familiar with the SEC Whistleblower Program before submitting the tip.
The only way whistleblowers can anonymously report a possible securities violation under the Whistleblower Program is if an attorney represents them. The attorney becomes an intermediary between the SEC and his or client. An attorney that bills him or herself as an SEC whistleblower attorneys will try to get clients the largest possible monetary reward from the SEC. The whistleblower’s identity may come out in court; however, few cases reach the trial stage. The whistleblower will eventually have to give the SEC their name if they want to claim the reward, however, the SEC does not disclose whistleblower’s names, even when reporting a multi million-dollar reward.
The Dodd Frank Act’s whistleblower provision is complicated, even with regards to eligibility. Consulting with an SEC Whistleblower Attorney has many advantages in addition to anonymity. An attorney can help a person determine if he or she is eligible for a reward and explain employment protections offered to whistleblowers. In many cases, the whistleblower is a bookkeeper, outside auditors or mid-level manager, not an attorney, who might understand the details of the SEC Whistleblower Program. An experienced attorney will also help a client maximize their reward by helping their client to follow the SEC reporting instructions carefully.
Case evaluations are confidential and a potential whistleblower does not have to give his or her identity to an SEC Whistleblower attorney during the initial consultation.