Part I
Do you work for a corporation regulated by the Securities and Exchange Commission (SEC)? The SEC Whistleblower Program provides significant rewards to employee whistleblowers—to date, more than $150 million to 42 whistleblowers. When an award is made, whistleblower attorneys note information that the SEC found important to making a significant award. This blog post offers some of that guidance to you. However, if you are considering becoming a whistleblower, retain experienced whistleblower counsel now, as simple mistakes could cost you millions in award money. The first part of this blog post will highlight the first two takeaways from the SEC’s award filings, and the next three are in Part II.
Establishing a Material Violation
Many people have knowledge of acts falling below best practices or that are unprofessional. That is not really sufficient to become a successful SEC whistleblower. The most important first step in an SEC whistleblower case is proving a clear and material violation of federal securities law. What this means is that the information you will provide is clear enough and serious enough that it justifies the SEC prosecuting the case.
What does this mean for you and your whistleblower counsel? Well, it means that your hunch that something illegal is occurring or the pattern of irregularities that you have noticed will need time and resources devoted to it to make it clear that specific illegal actions are taking place and that there is credible evidence supporting your allegation.
Your Eligibility Because May Affect Award Percentage
Once you have determined that specific, illegal actions are taking place, you must determine your SEC eligibility as a whistleblower. The next step in any successful whistleblower claim is to determine eligibility. In a broad sense, anyone who is involved with an SEC-regulated company can become a whistleblower, including attorneys, auditors, and board members. However, the most common person to come forward and report wrongdoing is an auditor or accountant who has access to the company’s financial filings.
There are complexities to determining eligibility that will require experienced counsel. For example, there are different eligibility rules for an internal auditor working for a corporation as opposed to an outside auditor hired to review a company’s books, and it is easier for the former to become a whistleblower than the latter. An internal auditor does not have a duty to report the illegal activity if he or she knows that the company is already aware of it, while an outside auditor must first report illegal activity to a superior and then wait to see if his or her superior reports it to the SEC. Knowing these requirements and others is critical to attaining your reward.
In short, you should not assume that you are an eligible SEC whistleblower just because you have knowledge of illegal activity. There are facts specific to your case that must first be analyzed by an experienced whistleblower attorney. That careful analysis may make a significant financial difference in your case; it could mean the difference between a multimillion-dollar whistleblower award and nothing.
CONTINUED IN THE NEXT BLOG POST
What Should You Do if You are Considering a Whistleblower Claim?
Are you considering filing an SEC whistleblower case? You will require the help of an experienced whistleblower attorney to decide whether the conduct you have observed constitutes an SEC violation. Evidence gathering, dealing with the federal government’s attorneys, important deadlines, statutes of limitations, and filing requirements make your representation both complex and time-sensitive.
Call Barrett Law now at (800) 707-9577 if you think you may be an SEC whistleblower.
Having expert legal advice by your side can mean the difference between receiving your share of a whistleblower reward and losing your career and livelihood. Call us today.
