Whistleblower Bounties

Sean McKessy, the head of the new Whistleblower Office with the Securities and Exchange Commission (SEC), has said that the agency has a fund with $453 million in it to be used to award bounties to whistleblowers under the new program. The whistleblower reward fund is funded by a Treasury account that holds SEC disgorgements and penalties. According to McKessy, the fund is separate and distinct from the fund that compensates victims of securities fraud so that those victims will not be prejudiced because of an award to a whistleblower.

Under the new Dodd-Frank Wall Street Reform and Protection Act whistleblowers can qualify to receive a reward if the SEC or other government authorities recovers more than $1 million based upon the information provided.

The general provisions of the new whistleblower law are, as follows:

  • The whistleblower can receive 10% to 30% of the money collected by the SEC or other prosecuting authorities based on the whistleblower providing original information of securities violations, if more than $1 million is collected.
  • Certain factors will determine the whistleblower’s reward such as the significance of the information provided; the assistance of the whistleblower and the whistleblower’s attorney and the programmatic interest of the SEC in deterring certain violations such as insider trading and other hot areas of focus.
  • The law specifically provides that employers may not fire, demote, suspend, threaten, harass or discriminate against a whistleblower. Whistleblowers that are retaliated against in some fashion are entitled to sue for reinstatement, back pay and other damages sustained.
  • Whistleblowers are protected by confidentiality. They can report the securities violations anonymously, as long as they are represented by a lawyer. A whistleblower’s identity might even remain unknown to the SEC or other prosecuting authorities until the time comes for the payment of the award.

Contact our SEC Whistleblower Recovery Center at 1-866-381-2434 for a confidential, no obligation consultation to see if you can qualify for bounties for information about securities violations that you have information about.

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