SEC Whistleblower Program

Employment Protections

Whistleblowers are now eligible for more employment protections than any other point in history.

The decision to blow the whistle on an employer can be difficult—striking at the very heart of basic principles like loyalty, security and being a team player. In the past, too often, good men and women remained silent. They feared getting involved. They looked the other way. With powerful anti-retaliation protections, the SEC Whistleblower Program has finally leveled the playing field.

How are Whistleblowers Protected by Federal Law?

The law is clear: Employers may not, directly or indirectly, discharge, demote, suspend, threaten, harass, or in any way discriminate against whistleblowers who: provide information to the SEC; initiate, testify in, or assist in an SEC investigation or related enforcement action; or make any disclosures required or protected by law. Reporting possible securities violations internally may also be considered a legally protected activity, depending on where a whistleblower resides. These protections exist regardless of whether or not the alleged securities violations are proven or lead to a successful enforcement action, as long as whistleblowers reasonably believe that their tips relate to a possible violation of the federal securities laws.

If whistleblowers are subjected to retaliation in violation of the law, they have the right to immediately sue their employers in federal court, without having to exhaust the administrative process before filing. The types of remedies available include reinstatement with equivalent seniority, double back pay with interest, attorney fees, and reimbursement of other litigation related expenses. Whistleblowers have six years from the retaliatory conduct, or three years from when the employee knew or reasonably should have known of the retaliatory conduct, to file a claim—if it is not more than 10 years after the violation occurred.

If I signed a confidentiality or non-disparagement agreement with my employer, can I still be an SEC whistleblower?

As a general rule, agreements that restrict or discourage SEC whistleblowers from reporting possible securities violations are unenforceable and may constitute a violation of law. The SEC has recently brought several high-profile enforcement actions against companies that use these illegal secrecy agreements, including the landmark $415 million case against Merrill Lynch originated by a group of Labaton Sucharow whistleblowers.

What if I was involved in the misconduct and now wish to report to the SEC?

The SEC Whistleblower Program allows for whistleblowers with potential culpability to report securities violations. Read more about employment protections on theIn fact, only individuals who have been criminally convicted of related wrongdoing are barred from receiving an SEC whistleblower award. All other less culpable whistleblowers may receive an award, but it will be reduced based upon their level of culpability. For instance, individuals who initially were unaware that they were assisting others in committing securities violations or were pressured by their superiors to engage in the violations may be eligible to participate in the program.

Read more about employment protections on the FAQ page.

Can Whistleblowers Remain Anonymous?

Of course, one of the best ways to insulate oneself from retaliation and blacklisting is to report workplace misconduct anonymously. Recognizing this reality, the SEC made anonymous reporting a key pillar of the whistleblower program.

To request a case evaluation, or call us at (212) 907-0700

Since SEC whistleblowers may also have rights under other federal and state whistleblower protection laws, we regularly coordinate with leading employment attorneys to ensure that every Labaton Sucharow client has a Dream Team of legal advisers—at no additional cost.

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