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SEC Whistleblower Program
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The SEC Whistleblower Program provides a monetary award to any eligible individual or group of individuals who voluntarily provide the Commission with original information about a possible violation of the federal securities laws that leads to a successful enforcement action resulting in monetary sanctions exceeding $1,000,000. The bounty paid to eligible whistleblowers is 10-30% of the sanctions collected, with the exact percentage allocated at the agency’s discretion.
There is no ceiling for an SEC whistleblower award.
In reaching the award determination, the SEC considers several factors such as the significance of the information; the degree of assistance provided by the whistleblower; law enforcement interest in prosecuting and deterring the type of securities violation involved in the submission; and, for employee whistleblowers, whether the potential violation was reported internally using organizational compliance procedures. The SEC has stated that in cases where the maximum whistleblower award available would be $5 million or less, it will apply a presumption to grant the maximum award, as long as certain negative factors (whistleblower culpability in the misconduct, interference with internal reporting, unreasonable reporting delay) are not present.
After a qualifying enforcement action is announced, the SEC will post a Notice of Covered Action on its website. To claim an award, SEC whistleblowers are required to mail or fax a completed application for award, SEC Form WB-APP, to the SEC Office of the Whistleblower within 90 calendar days of the notice date. If the whistleblower provided his or her original submission anonymously, the whistleblower must disclose his or her identity on the Form WB-APP.
As a courtesy, the SEC Staff often notifies known SEC whistleblowers or their legal counsel about the successful enforcement action and the opportunity to apply for an award. That being said, SEC whistleblowers are solely responsible for monitoring the SEC’s Notices of Covered Actions, so they do not miss the deadline for filing an application for award.