What You Should Know About The SEC Whistleblower Program

Securities fraud harms markets and investors. It can result in massive losses if allowed to persist. Various laws have been enacted to prevent fraud and penalize perpetrators. One of those is the Dodd-Frank Act which includes provisions for a whistleblower program.

What Is SEC Whistleblowing?

Detecting fraud can be extremely difficult since those who are doing it are deeply embedded in the system. They know the technicalities and are able to cover their tracks well enough to avoid discovery. The best way to learn about their existence is for someone from the inside to come forward with information. This is where the whistleblower program comes in. The Securities and Exchange Commission encourages people to give them tips in return for financial incentives.


The SEC receives thousands of tips each year. In order to be eligible,a person must provide original information that can lead to a successful intervention. It should revolve around possible violations of federal securities laws. This might have occurred in the past,in currently in play,or is set to happen in the future. The monetary sanctions should be more than $1 million. Only individuals,acting voluntarily,can become whistleblowers,even if they have a [dcl=6683]. Companies are excluded from the program.


Ideally,the info provided has specific and verifiable details so that investigators will know where to look. They want names,sample transactions,and credible evidence. Only violations of federal securities laws will be entertained. Others might be referred to different law enforcement agencies. Include in their scope are Ponzi schemes,price manipulation,insider trading,misleading statements,naked short selling,and bribery of foreign officials.


The incentive will be between 10% and 30% of the monetary sanctions. Employers will be barred from taking retaliatory action against whistleblower employees. For more information about the program,contact an [dcl=6683].

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