The Securities and Exchange Commission announced its first award under the SEC’s Whistleblower Program on August 21, 2012. The whistleblower will receive nearly $50,000, which represents 30 percent of the amount collected thus far in an SEC enforcement action.
The SEC Whistleblower Program, which has been in effect for one year, has its roots in the Dodd-Frank Wall Street Reform and Consumer Protection Act, and is designed to provide monetary incentives to individuals to report possible violations of the federal securities laws to the SEC.
In order to qualify for an award under the program, a person must:
• voluntarily provide “original information” about a possible violation; and
• the information must lead to a successful SEC action resulting in an order of monetary sanctions exceeding $1 million.
If these conditions are met, the Dodd-Frank Act authorizes the SEC to award individuals providing the information from 10 percent to 30 percent of any money collected in an enforcement proceeding. In the instant action, the SEC obtained an order of more than $1 million in sanctions, but has only collected $150,000 to date. If the SEC is successful in collecting more, the amount awarded to the whistleblower should be increased.
The identity of the whistleblower who received the award was not disclosed by the SEC. This is consistent with several provisions of the SEC program designed to protect individuals with pertinent information of potential securities violations. When an individual supplies information to the SEC, they can do so anonymously through an attorney. Even when information is not submitted anonymously, the SEC will endeavor to protect the identity of the whistleblower as much as possible. Moreover, provisions exist which provide redress to whistleblowers who are subjected to retaliation by an employer.
The consumer rights law firm of DiTommaso-Lubin represents whistleblowers who are pursing qui tam lawsuits at any level of government or for violations of the securities laws and IRS code, including claims under the Illinois Whistleblower Act, the Chicago whistleblower ordinance, the Dodd-Frank Act and the federal False Claims Act. Based in Chicago and Oak Brook, Ill., our Aurora and Geneva area qui tam and False Claims Act lawyers stand ready to represent whistleblowers throughout the United States — regardless of whether prosecutors have decided to join the lawsuit. If you know about fraud against a government agency and you’re ready to speak up, you can learn more about whistleblower lawsuits at a free, confidential consultation. To set one up, please contact DiTommaso-Lubin online or call 1-877-990-4990 today.