To claim an SEC whistleblower award you must follow a specific procedure. First, you must have filed a form TCR under the SEC Whistleblower Program, either anonymously or not. Next, the SEC has to have recovered money against the company you reported for securities fraud. Then, you can start the process of claiming an SEC whistleblower award.
The process of claiming an SEC Whistleblower award is not intuitive. You should consider hiring an SEC whistleblower attorney to assist you in filing.
Notice of SEC Whistleblower Award
Explained in detail here, if there is a matter in which the SEC collects over one million dollars in sanctions, the Office of the Whistleblower (“OWB”) posts a Notice of Covered Action (“NoCA”) on its website. Anyone who believes they are entitled to claim an SEC whistleblower award submits an application in response to the posted NoCA. After receiving an application for an SEC whistleblower award, the OWB assesses the application and confers with relevant staff.
The SEC performs an analysis of the application. First, the SEC analyzes the detail of the contribution of the claimant. Next, if any, OWB then makes recommendations to the Claims Review Staff as to an SEC whistleblower award. The Claims review staff is comprised of five senior members of the SEC enforcement division. The Claims review staff decides award eligibility.
Factors Used To Determine SEC Whistlebower Award Amount
The SEC Whistleblower program rules describe seven factors used to determine whether to (1) issue award, and (2) increase or decrease the percentage of an award. Explained further, the four factors that may increase an award are:
- the significance of the information provided by the whistleblower,
- the assistance provided by the whistleblower,
- any law enforcement interest that might be advanced by a higher award, and
- the whistleblower’s participation in internal compliance systems – as in, if you reported on a company that you currently or used to work for, did you report internally first, and did you participate in any internal investigation.
There are three factors that can decrease the percentage of an SEC whistleblower award. These three factors are:
- an unreasonable reporting delay by the whistleblower and
- interference with internal compliance and reporting systems.
In addition to the SEC whistleblower program, where an individual can claim an SEC whistleblower award, there are other laws that give awards. One in particular is the Motor Vehicle Safety Whistleblower Act which allows whistleblowers to file tips alleging fraud in car manufacturing. These laws allow individuals with knowledge of fraud to come forward and obtain a percentage of the reward if the case is successful.
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