The Securities and Exchange Commission released an informative video by Sean McKessy, who is the Chief of the SEC’s Office of the Whistleblower.   As Mr. McKessy explains in the video embedded below, the SEC has its own special Whistleblower Program to award tipsters who report violations of securities laws.

The Commission can award a whistleblower between 10%-30% of the money collected in a case.  Under the SEC program, whistleblowers can even submit tips anonymously  – but to submit an anonymous tip, the whistleblower must be represented by legal counsel.

Answers to Common Questions Asked by Potential Whistleblowers

The video by Sean McKessy addresses these common whistleblower concerns:

  1. How do I submit a tip?
  2. What happens to my tip once the SEC receives it?
  3. How do I make my tip more useful?
  4. How does the investigation of a tip work?
  5. How do I find out if a matter that I have reported has led to a successful investigation?
  6. What four factors are considered to increase the size of the award to the whistleblower?
  7. What three factors are considered to decrease the size of the award to the whistleblower?

In sum, the more specific, timely, and credible information a whistleblower can provide, the better the SEC will be able to investigate it. After submitting a tip, the Commission urges whistleblowers to follow-up on it by sending in any updates or developments that occur.

For whistleblowers to maximize the potential award they receive, they should understand the positive and negative factors that the Commission considers to determine an award percentage — and to be patient.  Securities laws can be very complex, and Commission enforcement actions can take years to finalize.  Additional information about the SEC’s program (which is different than the False Claims Act) can be found at SEC Whistleblower FAQ.

Tipster Awarded $30 Million For Blowing Whistle on Securities Fraud

In September 2014, the SEC announced a $30 million award to a whistleblower, the Commission’s largest-ever whistleblower award.  The previous high for an SEC award to a whistleblower was $14 million, which was announced in October 2013.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

If you would like help evaluating your case or submitting a tip to the Commission, please contact us for a confidential consultation.  We’d be pleased to help.


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