The U.S. Securities and Exchange Commission’s (SEC) Whistleblower Program was created in Section 922 of the Dodd-Frank Act of 2010, which amended the Securities Exchange Act to include a whistleblower provision. It has since become one of the most popular federal programs for whistleblowers to report evidence of misconduct.

If you have obtained evidence of a possible securities law violation and want to bring it to the attention of the SEC, there are some things that you should know. This handbook summarizes the most pertinent of them.

1. What is the SEC Whistleblower Program?

The SEC Whistleblower Program is the product of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which was passed in the aftermath of the Great Recession. As a reactive piece of legislation, the goal of the Dodd-Frank Act was to make it more difficult for companies and corporations to hide information about their finances. One way that the Act did this was to add whistleblower provisions to several existing laws, giving private citizens with evidence of corporate misconduct and securities laws violations an avenue to bring that information to the attention of law enforcement.

One of those whistleblower programs was formed with the SEC, which opened its Office of the Whistleblower and promulgated a handful of regulations to flesh out the details of the Program and explain its process for whistleblowers and their lawyers.

Since its inception, the Securities and Exchange Commission Whistleblower Program has been one of the most successful of the programs created by the Dodd-Frank Act. During fiscal year 2023 alone, the Program received over 18,000 whistleblower complaints and 40,000 other tips. The year was a record for whistleblower awards as well, with the SEC paying out nearly $600 million, including a record-breaking $279 million to the whistleblower who brought forward key information in telecommunications company Ericsson’s bribery scheme – an investigation that ended with the company paying a $1.1 billion settlement.

2. What Kinds of Securities Misconduct Can Be Reported to It?

The SEC Whistleblower Program takes evidence of a wide variety of securities violations, including violations of the following statutes and their attendant regulations:

• Sarbanes-Oxley Act (SOX)
• Dodd-Frank Act
• Securities Act of 1933
• Securities Exchange Act of 1934

This includes whistleblower claims that allege:

• Bribery
• Corruption involving foreign officials
• Insider trading
• Ponzi and pyramid schemes
• Accounting fraud
• Market manipulation, such as front running, pump-and-dump schemes, and wash trading
• Selling unregistered securities
• Investment fraud
• Embezzlement
• Misappropriation of client funds
• Failing to comply with recordkeeping obligations
• Financial reporting violations, including omitting or misrepresenting material information
• Cryptocurrency fraud
• Abusive short selling
• Other forms of securities fraud

If you have evidence of any of these types of potential securities law violations, you can become an SEC whistleblower. According to the agency, the types of evidence that the SEC is particularly interested in receiving are those that are specific, credible, and timely, and that:

• Identify the individuals who are involved in the scheme
• Provide concrete examples of specific fraudulent transactions
• Proffer non-public material and information about a fraudulent scheme

3. How are Reports Made to the Program?

The SEC’s Office of the Whistleblower has an online Tips, Complaints, and Referrals (TCR) portal. Either this portal or a physical copy of the TCR Form must be used in order to be eligible for a whistleblower award.

However, filling out and filing a TCR Form should be the last step that a whistleblower takes, not the first. You want to present the SEC with the best case that you can put forward, so submitting a TCR Form right after you first unearth evidence of misconduct is not a wise move. With little to support your allegations that it is incriminating evidence, the SEC is unlikely to act on it.

Instead, you should conduct a preliminary investigation of your own to gather as much supporting documentation as you possibly can. Only after you have a strong whistleblower case should you approach the SEC with it.

Having a whistleblower attorney representing you during that preliminary investigation is extremely important. They will have a good idea of what evidence is going to persuade the SEC to take your case over, as well as how to maximize your whistleblower award. They will also have experience guiding whistleblowers through this delicate investigation and can help you make decisions that reduce the odds that you are caught.

4. Can My Employer Retaliate Against Me for Being a Whistleblower?

Not lawfully, no.

Among the provisions that the Dodd-Frank Act added to the Securities Exchange Act was 15 U.S.C. § 78u-6(h)(1). This is the anti-retaliation provision that gets violated whenever an employer fires, demotes, suspends, harasses, discriminates, or even threatens a whistleblower, whether directly or indirectly. This includes having you sign a confidentiality agreement, severance agreements, or separation agreements that discourage whistleblowing. If your employer violates this provision, you can file a lawsuit against them in federal court. That whistleblower retaliation lawsuit can recover double the wages that you would have earned, plus interest, as well as the costs of the lawsuit, including your attorneys’ fees. You can also get reinstated to your old position or recover front pay if you do not want to go back.

5. Do Whistleblowers Get Paid?

SEC whistleblowers who disclose their findings in the correct fashion stand to recover a share of the proceeds of the case, if it secures at least $1 million. That share can range between 10 and 30 percent, depending on how important your information was to the SEC’s prosecution. Depending on the type and extent of the misconduct that you reported, though, that share can result in a substantial award of well above a million dollars.

“Whistleblowers can also recover a share of any ‘related actions’ in addition to the SEC’s case. This frequently happens when the conduct that you blew the whistle on was criminal in nature. The SEC only has the authority to pursue civil or administrative remedies. If it settles a civil claim or secures a judgment against the defendant, you would get a share of that amount. But if the SEC then makes a criminal referral of the case to another law enforcement agency, typically the Department of Justice (DOJ), and then that agency secures a criminal fine or another financial settlement, you could also receive a share of those winnings, as well.” – Dr. Nick Oberheiden, an SEC whistleblower lawyer and founding partner of the national law firm for whistleblowers, Oberheiden P.C.