The Securities and Exchange Commission (SEC) Office of the Whistleblower rejected a claim for an award earlier in the summer because it was not “original” under the SEC’s whistleblower law. The claimant originally filed a report of accounting fraud in 2006. The SEC pursued the claim and a consent judgment for penalties, disgorgement and interest was entered. However, the claim was not eligible for an award because it was not original information according to SEC’s whistleblower law.
The SEC pays an award to a tipster when the whistleblower voluntarily provides original information to the SEC that causes a successful enforcement in a federal court or administrative action in which the SEC collects a penalty of more than $1 million.
The SEC’s whistleblower law requires that original information must:
The law explains that “independent knowledge and analysis” means information that is not derived from public sources alone.
The amount of the award given to a tipster whose disclosure leads to enforcement in court is 10 percent to 30 percent of what the SEC collects from the defendant. While the SEC has sole authority to decide the amount of an award, it evaluates the following factors:
Even if you possess valuable information of fraud, corruption and misconduct, to merit receiving an award, it is crucial to comply with every detail of the whistleblower law. An experienced Texas whistleblower attorney can provide valuable guidance.