Securities Whistleblower Reward

Learn What You Need to Know About Seeking a Monetary Reward as an SEC Whistleblower

The U.S. Securities and Exchange Commission (SEC) pays financial rewards to eligible whistleblowers. Under the SEC Whistleblower Program, eligible whistleblowers who provide information about securities violations leading to the recovery of $1 million or more are entitled to a financial reward calculated as a percentage of the monetary sanctions collected.

If you have information about a possible violation of federal law related to a company’s reporting and recordkeeping obligations, a fraudulent securities offering, or any other form of investor fraud, our attorneys can determine if you are eligible to seek a whistleblower reward from the SEC. If you are—and if you decide to come forward—we can assist you with reporting fraud through the appropriate means and then assist with collecting your award in the event of a successful SEC enforcement action.

About the SEC Whistleblower Program

Securities whistleblower awards are issued under the SEC Whistleblower Program. Here are some key facts about this program for prospective whistleblowers:

1. The Program is Administered by the SEC Office of the Whistleblower

The SEC Office of the Whistleblower administers the Commission’s whistleblower program. The Office of the Whistleblower is responsible for protecting a whistleblower’s identity once they come forward, and it is responsible for paying a whistleblower award out of the SEC’s Investor Protection Fund when the SEC secures monetary sanctions using the information provided by the whistleblower.

2. The Program is Responsible for Many of the Largest Whistleblower Rewards in U.S. History

The SEC Whistleblower Program is responsible for many of the largest whistleblower rewards in U.S. history. This includes the largest award ever issued to a whistleblower—$279 million paid to a whistleblower who exposed securities fraud in 2023.

3. The SEC Relies Heavily on Whistleblowers to Come Forward

The SEC’s success in pursuing successful enforcement actions is heavily dependent upon whistleblowers’ willingness to come forward in many cases. From insider trading to Ponzi schemes and manipulation of the financial markets, the SEC routinely relies on whistleblowers’ information to pursue legal action on behalf of harmed investors.

4. Whistleblowers Must Comply with Stringent Requirements to Establish Reward Eligibility  

Before submitting information to the SEC, employee whistleblowers and other individuals must ensure that they can comply with the Commission’s stringent requirements for establishing reward eligibility. We discuss these requirements in detail below.

5. Rewards Are Available in Cases Resulting in the Recovery of $1 Million or More

The SEC’s Office of the Whistleblower will pay a whistleblower reward when a whistleblower tip leads to the recovery of $1 million or more. As discussed in greater detail below, the value of the information a whistleblower provides is one of several factors involved in determining the whistleblower’s reward amount.

SEC Whistleblower Rewards Typically Range from 10% to 30% of the Funds Recovered

Whistleblower rewards in securities enforcement cases typically range from 10% to 30% of the funds recovered. There is no maximum award amount; and, while certain “negative factors” can reduce a whistleblower’s reward below 10% of the government’s recovery, this is relatively rare.

When calculating reward amounts, the SEC generally considers factors including:

• The value of the information the whistleblower voluntarily provided
• The timeliness of the whistleblower’s disclosure
• The whistleblower’s level of cooperation with SEC staff
• Any additional assistance provided during the SEC’s investigation
• The amount of money collected through the SEC’s enforcement action

Since SEC enforcement actions will almost always involve more than $1 million in dispute (and often significantly more), when the SEC pursues a successful enforcement action based on credible information obtained from a whistleblower, the whistleblower will generally be entitled to a reward. If you are interested in reporting fraud or other misconduct to the SEC and seeking a monetary reward, we encourage you to contact us promptly for more information.

Requirements for Seeking an SEC Whistleblower Award

To qualify for a monetary reward, securities whistleblowers must meet several eligibility requirements. The major requirements for establishing securities whistleblower reward eligibility are as follows:

1. Providing Original Information to the SEC

Whistleblowers must provide “original information” to the SEC. This can be information that is based on either: (i) independent knowledge; or, (ii) independent analysis.

2. Not Being Primarily Responsible for the Violation(s) Disclosed

While “culpable whistleblowers” can receive monetary rewards from the SEC in many cases, whistleblowers cannot be primarily responsible for the violation(s) they disclose to the Office of the Whistleblower.

3. Coming Forward Through the Appropriate Means

In all cases, securities whistleblowers must report a potential violation (or potential violations) through the appropriate means. As discussed above, this involves filing a formal complaint with the SEC’s Office of the Whistleblower.

4. Demonstrating that an Investigation is Warranted

While securities whistleblowers are not required to provide any specific type or amount of information, they must provide sufficient information to demonstrate that an investigation is warranted. This means that they must provide information which supports a violation of one or more of the following:

• Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)
• Investment Advisers Act
• Securities Exchange Act
• Sarbanes-Oxley Act (SOX)
• Other federal securities laws and SEC regulations

When we represent prospective whistleblowers, we review the information they have in their possession under the protection of the attorney-client privilege. We do not share any information with the SEC unless our clients expressly authorize us to do so; and, before our clients come forward, we advise them regarding their options to proceed anonymously or confidentially.

5. Assisting with a Successful Enforcement Action

To secure a financial award, securities whistleblowers must assist the SEC with pursuing a successful enforcement action. If the SEC pursues a successful enforcement action resulting in the recovery of $1 million or more, the whistleblower is entitled to an award based on the factors discussed above.

While these are the minimum requirements for establishing securities whistleblower reward eligibility, whistleblowers must take additional steps to maximize their potential rewards. When we represent securities fraud whistleblowers, we make sure our clients know what they need to do to maximize their reward potential, and we work with the SEC directly on behalf of our clients.

FAQs: SEC Whistleblower Rewards for Exposing Securities Fraud

Are You Eligible to Seek an SEC Whistleblower Award? Find Out for Free

If you would like to know more about seeking a monetary reward under the SEC Whistleblower Program, contact us today. To discuss your case with one of our senior whistleblower attorneys in strict confidence as soon as possible, call 866-320-3959 or request a free initial consultation online today.