Contact Nashville Whistleblower Attorney Timothy L. Milles Today if You Are Thinking of Blowing the Whistle
INTRODUCTION to the sec whistleblower program Call Nashville whistleblower attorney Timothy L. Miles if you are considering blowing the whistle
The U.S. Securities and Exchange Commission’s (SEC) Whistleblower Program has seen a surge in the number of individuals reporting violations and, in the amount awarded as whistleblower awards. In FY 2022, the SEC awarded approximately $229 million in 103 awards. Since its inception, the SEC has paid over $1.3 billion in 328 whistleblower awards to individuals for providing information that led successful SEC and other agencies’ enforcement actions. In fact, enforcement actions brough on whistleblower information has resulted in more than n $6.3 billion in total recovery, which included more than $4.0 billion in disgorgement of ill-gotten gains. In 2022, the SEC received over 12,300 whistleblower tips, representing the largest number of whistleblower tips it has received in a fiscal year.
After the financial crisis of 2007-2008, Section 922 of the Dodd-Frank Act was passed creating the SEC Whistleblower program. Its purpose was to encourage individuals to report violations by offering a financial incentive via whistleblower awards and protections for whistleblowers in the form of retaliation. Most individuals are reluctant to come forward with violations over concerns with their job and career. However, by offering whistleblowers anonymity, protection from retaliation and financial rewards, the SEC addressed this concern which is evident in the record number of individuals reporting violations. In fact, since its inception, the SEC Whistleblower program has collected over $6 billion in fines, of which more than $1.5 billion will be returned to harmed investors. Under the initiative, a person who voluntarily provides unique information that results in a successful SEC enforcement action and a penalty exceeding $1 million may receive an award ranging from 10-30% of the penalty. The program has already distributed close to $2 billion to whistleblowers. Reporting a breach can lead to a significant whistleblower award. The typical award is approximately $5 million, with the highest award to date, issued this year, was nearly $279 million. In 2023, the SEC awarded nearly $600 million to 68 individual whistleblowers. Significantly, the awards distributed by the SEC are funded directly from the penalties imposed on offenders. Section 922 of the Dodd-Frank Act created an Investor Protection Fund to guarantee that no funds would be diverted from injured investors to cover whistleblower awards. Consequently, this program costs nothing to the taxpayers. However, a potential downside is that if a whistleblower's information results in a penalty, but the offending company is unable to pay (such as in cases of bankruptcy), the whistleblower will not receive their reward. eligibility to participate in the program
Almost anyone can take part in the whistleblower program. While it is challenging, attorneys employed by a company can still qualify for a whistleblower award under certain conditions. Typically, an attorney might be eligible only in rare and extreme cases, such as when they need to expose fraud to prevent the SEC from being deceived. This situation could occur if an attorney discovers that their client is unlawfully destroying evidence to obstruct an SEC investigation.
The guidelines for non-attorneys working in compliance or audit departments are more lenient. This is because the SEC aims to balance the urgency of stopping fraud promptly with allowing companies to use their internal systems for self-reporting violations. For instance, non-attorneys are permitted to join the whistleblower program if their information disclosure is crucial to preventing immediate harm to investors or if they have already reported their concerns within the company. This policy ensures that non-attorneys in compliance or audit roles are not motivated to bypass the company's internal processes by reporting directly to the Commission before the company has a chance to address the issue. PROTECTIONS PROVIDED TO WHISTLEBLOWERS
Individuals who disclose potential breaches of securities laws to the SEC are safeguarded against retribution by both Sarbanes-Oxley (SOX) and Dodd-Frank. Each of these legislations shields whistleblowers from various retaliatory actions, such as being fired, demoted, harassed, or subjected to other negative consequences. Nevertheless, the range of protection under these laws differs.
For instance, whistleblowers are covered under SOX if they report to either their superiors or the federal government. In contrast, Dodd-Frank provides protection solely for those who report directly to the federal government. Additionally, before initiating legal proceedings, SOX whistleblowers must file a grievance with the Occupational Safety and Health Administration within 180 days of the supposed retaliation. Conversely, Dodd-Frank whistleblowers are not bound by this requirement and can pursue legal action directly. The SEC's whistleblower program also acknowledges that maintaining anonymity is crucial for protecting whistleblowers from retaliation. Consequently, the SEC permits anonymous reporting as long as it is done through an attorney. This arrangement allows the whistleblower's lawyer to interact with the SEC on their behalf, thereby safeguarding the whistleblower's identity. TYPES OF VIOLATIONS
The SEC is particularly focused on fraud that negatively impacts investors and on Ponzi schemes. Additionally, the SEC rigorously targets breaches of the Foreign Corrupt Practices Act (FCPA). These violations often involve companies offering bribes to foreign government officials to secure contracts, licenses, permits, or business opportunities, resulting in some of the heftiest fines imposed by the SEC.
MUST PROVIDE CREDIBLE, TIMELY AND ORIGINAL INFORMATION
IIn order to qualify for a whistleblower award, the individual must provide the SEC with credible, timely, and original information and assistance. The SEC has published rules which outline the procedures for both filing and obtaining whistleblower awards. Specifically, Section 240.21F-3 states that the SEC with pay an award or award to one or more whistleblowers who:
(1) Voluntarily provide the Commission (2) With original information (3) That leads to the successful enforcement by the Commission of a federal court or administrative action (4) In which the Commission obtains monetary sanctions totaling more than $1,000,000. Original information is defined as: (i) Derived from your independent knowledge or independent analysis; (ii) Not already known to the Commission from any other source, unless you are the original source of the information; (iii) Not exclusively derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media, unless you are a source of the information; and (iv) Provided to the Commission for the first time after July 21, 2010 (the date of enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act). Independent knowledge is defined as "factual information in your possession that is not derived from publicly available sources. You may gain independent knowledge from your experiences, communications and observations in your business or social interactions." the process for reporting violations
To be eligible for an award under the SEC Whistleblower Program, individuals must provide information about potential violations of securities laws to the SEC, either online or through postal mail. Those submitting tips anonymously must have legal representation to handle their submission and claim for a reward.
The general process for filing a complaint and applying for a whistleblower award involves several steps:
Filing a whistleblower complaint with the SEC is a series and complicated matter and should be done with a knowledgeable and experienced SEC whistleblower attorney familiar in navigating the process. Protection Against Retaliation
The Dodd-Frank Act strictly forbids employers from taking any retaliatory actions against individuals who provide information to the SEC or assist the agency. Whistleblowers who face job-related retaliation have the right to sue for:
Examples of retaliation include firing, demoting, harassing, suspending, or discriminating against an employee for helping the Commission with an investigation. Additionally, the SEC is empowered to enforce actions against companies that retaliate against employees who report possible violations of securities laws. Under Exchange Act Rule 21F-17(a), it is prohibited to take any action that would prevent an individual from directly communicating with Commission staff regarding a potential securities law breach. The SEC has levied substantial fines on companies found in violation of whistleblower protection statutes. It is important to note that the Dodd-Frank Act provides a lengthy statute of limitations—up to six years—for reporting financial misconduct and decreases rewards for whistleblowers who unreasonably delay in reporting a violation. the importance of filing anonymously
One of the most significant advancements in federal whistleblower legislation is safeguarding the anonymity of Wall Street whistleblowers. The Dodd-Frank Act allows whistleblowers to submit cases anonymously, ensuring that all details of their case, including the identities involved, are kept confidential.
CONCLUSION
The SEC's Whistleblower Program, established under Section 922 of the Dodd-Frank Act, has proven to be an effective tool in combating securities fraud and protecting investors. The program's success is evidenced by the substantial monetary awards given to whistleblowers and the significant recoveries made from enforcement actions based on their information. In FY 2022 alone, the SEC awarded approximately $229 million, contributing to a total of over $1.3 billion awarded since the program's inception. These efforts have facilitated the recovery of more than $6.3 billion in total, including $4.0 billion in disgorged ill-gotten gains.
The program incentivizes individuals to report violations by offering anonymity, protection from retaliation, and financial rewards, addressing the common reluctance to come forward due to job security concerns. With over 12,300 tips received in 2022, the highest in a fiscal year, it is clear that these measures have increased participation. The SEC has made nearly $2 billion in awards to whistleblowers, with the highest single award reaching nearly $279 million in 2023. Importantly, the awards are funded through penalties imposed on offenders, ensuring that no taxpayer money is used and that harmed investors receive restitution. However, the program does have limitations, such as the inability to compensate whistleblowers if the offending company is bankrupt and unable to pay the penalty. The program is inclusive, allowing almost anyone to participate, with specific guidelines for attorneys and non-attorneys in compliance or audit roles. These guidelines aim to balance the urgency of stopping fraud with the need for companies to self-report violations. Legal protections under Sarbanes-Oxley and Dodd-Frank further safeguard whistleblowers from retaliation, with Dodd-Frank offering more direct recourse for those who report violations to the federal government. The SEC also emphasizes the importance of anonymity, allowing reports through attorneys to protect whistleblower identities. The program's focus on fraud impacting investors, Ponzi schemes, and violations of the Foreign Corrupt Practices Act underscores its commitment to maintaining market integrity. By providing credible, timely, and original information, individuals can play a crucial role in the SEC's enforcement actions, ensuring accountability and justice within the securities industry. IF YOU ARE THINKING OF BLOWING THE WHISTLE, CONTACT NASHVILLE WHISTLEBLOWER ATTORNEY TIMOTHY L. MILES TODAY
If you have knowledge of fraud against or by the federal government, contact Nashville whistleblower attorney Timothy L. Miles who can guide you through the whistleblower process and explain your whistleblower protections. The consultation is free and confidential. Just complete the form below to get started or call (855) 846–6529 or email [email protected]. Ask a Nashville Whistleblower attorney, you could be entitled to a significant whistleblower award.
Call today and see what a Nashville whistleblower attorney can do for you.
NASHVILLE WHISTLEBLOWER ATTORNEY
TIMOTHY L. MILES, ESQ. The Law Offices of Timothy L. Miles Tapestry at Brentwood Town Center 300 Centerview Dr., #247 Brentwood, TN 37027 Phone: (855) 846–6529 Email: [email protected] NASHVILLE WHISTLEBLOWER ATTORNEY TIMOTHY L. MILES Nashville attorney Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles has dedicated his career to representing shareholders, employees, and consumers in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors, shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for the underdog, as well as his unbendable ethical standards. Mr. Miles was recently selected by Martindale-Hubbell® and ALM as a 2022 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association,Class Action: Class Action: Top National Trial Lawyers, National Trial Lawyers Association (2023), a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019); a Top Rated Litigator by Martindale-Hubbell® and ALM (2019-2022); America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022). Mr. Miles has published over sixty articles on various issues of the law, including class actions, whistleblower cases, products liability, civil procedure, derivative actions, corporate takeover litigation, corporate formation, mass torts, dangerous drugs, and more. Please visit our website or call for free anytime. Comments are closed.
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