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How a Lawyer Can Help SEC Whistleblowers

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The job of the SEC whistleblower law firm is to ensure that you can report all instances of abuse without fear of reprisals. A whistleblower’s job is critically important, and his or her courageous actions protect investors and ensure that the markets are fair for everyone.

As brave individuals stand up to the corruption that surrounds them, these SEC tips will ensure that their rights are protected when they hire an SEC whistleblower law firm.

The SEC whistleblower program came into being because there was a series of corporate scandals that injured several individuals and companies as well. Legislators decided that the answer to this problem had to include individuals who had intelligence that would help law enforcement officials police the marketplace. This truth led the government to pass the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Maintaining Anonymity

The new law allowed the SEC to create a bounty that would enable a whistleblower to report wrongdoing anonymously without fear of losing his or her job.

It would also entitle the individual to an SEC whistleblower award.

Individuals must qualify for this award by presenting the SEC with information that leads to enforcement action that causes it to receive more than $1 million in sanctions. The individual or group of individuals must offer this information freely. If so, the individual or individuals would receive between 10 percent and 30 percent of the money that is to be collected in sanctions.

The fact that individuals can report wrongdoing anonymously has made the whistleblower program as effective as it has been. The fear of retaliation has stopped people from bringing wrongdoing to light in the past. Because there weren’t any witnesses who were willing to come forward, law enforcement officials found it impossible to gather evidence and then prosecute these securities violations. Perpetrators of these crimes couldn’t be stopped in the earliest stages for that reason.

Because of the Dodd-Frank Wall Street Reform and Consumer Protection Act, individuals are willing to come forward and report what they know.

A majority of the people who have evidence of wrongdoing opt to report it anonymously, but they must have a lawyer to do so. After you hire your attorney, you are required to sign a whistleblower submission under the penalty of perjury. It will be your lawyer’s job to represent you in the offices of the SEC while an investigation is going on. He or she will also work to ensure that you receive the highest award in the event that there is a successful enforcement action.

Fear of Retaliation

Under the law, your employer is not allowed to retaliate against you because you are a whistleblower. This means that your employer may not fire you, demote you, harass you, suspend you or threaten you if you take part in any of the following three actions:

  •       Present evidence of wrongdoing against your employer to the SEC
  •       Participate in investigations undertaken by judicial or administrative actions
  •       Make required or protected disclosures under any law or regulation that is subject to the jurisdiction of the SEC

In the event that your employer does retaliate against you, you will be entitled to file a lawsuit against him or her. You can be compensated in several ways. If you win your case, your employer may be required to pay your legal fees. Also, you may receive double back pay and reinstatement to your former job.

In order to file this type of lawsuit, you are required to possess a “reasonable belief” that the information that you provided the SEC demonstrates that a securities violation took place. Your SEC whistleblower office can help you determine whether this is the case or not.

The Award

To qualify for the award, you must offer your information freely and voluntarily.

The information that you or a group of individuals provide to the SEC must be original. This means that you must have come across this information through independent knowledge or independent analysis.

Independent Knowledge

The definition of independent knowledge according to the SEC is information that is known to be factual that the individual did not learn from a publicly available source. This type of knowledge may have come from the individual’s own observations, communications, experiences or interactions. This means that information the individual learned from a third party is considered to be independent knowledge.

Independent Analysis

Independent analysis comes from the individual’s examination or evaluation of documents that have been made publicly available. This examination or evaluation leads the individual to learn something from the documents that the average person wouldn’t know.

The information cannot be known to the SEC already. It also cannot be an allegation that was made in the media, an investigation, a report, audit or hearing from the government or a judicial or administrative hearing unless you are an original source of the information. Lastly, it must be information that was given to the SEC after July 21, 2010.

Your information must be the reason that the SEC opens up an investigation. The SEC may also reopen an investigation that is already closed in order to add the information that you provided. Your information may lead to the investigation of additional conduct in an investigation that is currently being conducted. The information must also be related to an investigation that is currently going on and that is responsible for the successful enforcement action that takes place.

You will be entitled to an award after successful enforcement action occurs and the SEC receives more than $1 million in sanctions from the guilty party. When the SEC has this money, it will let everyone know by posting a Notice of Covered Action on its website. You will not be able to obtain this money without your attorney, so your legal counsel will need to submit an application for the award for you. The SEC Form WB-APP must arrive at the SEC office within three months of the notice date.

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