In 2010, the United States Securities and Exchange Commission (SEC) established a whistleblower program. This program promises substantial bounties to those who expose wrongdoing, but some whistleblowers who have assisted the SEC say that the award money is slow to come, if it ever comes at all. A close look at the structure of the SEC whistleblower program gives some hints as to why this may be the case.
The reason for the delays in payment may be that the awards are only paid out on sanctions that are actually collected by the SEC. This means that the SEC must receive the funds from the parties who were sanctioned before the award is calculated and sent to the whistleblower. In some cases, it is possible that some or all of the sanctions may be unavailable for collection due to perpetrators who escape from the jurisdiction of the United States with their money or situations in which the money vanished during the course of the fraudulent activity. The collection requirement of the whistleblower program could also explain why whistleblowers reporting on some of the most commonly reported sources of fraud, including penny stocks, U.S.–listed Chinese stocks, and pyramid schemes, encounter difficulty in collecting payment. Some of the whistleblowers who are waiting for payment have made numerous claims for awards in various fraud cases. Unfortunately, the SEC does not make information readily available regarding whether specific sanctions have been collected, so whistleblowers have no way of knowing whether they should expect payments to be forthcoming.
According to the SEC, over fifty million dollars in awards have been paid out already, with more payments to come as sanctions are recovered. Since the beginning of the whistleblower program, over ten thousand tips have been submitted, three hundred people have applied for bounties, and seventeen payouts have been made. The agency views the program as a tremendous success, and hopes that whistleblowers will continue to expose the frauds that they have witnessed.
Barrett Law PLLC: Protecting the Rights of Mississippi Whistleblowers
The bounties that are promised by the SEC whistleblower program have attracted a lot of tips from people who are eager to expose wrongdoing that they have encountered. While the structure of the SEC whistleblower program does create some uncertainty about whether and when individual whistleblowers will be paid for their participation in the program, some of the whistleblowers who have not been paid continue to sniff out and expose fraud. If you have witnessed fraudulent business dealings like the types that the SEC whistleblower program seeks to expose, the Mississippi Whistleblower Attorneys at Barrett Law PLLC are here to help you. Our attorneys are skilled at navigating the complexities of whistleblower lawsuits, including the SEC whistleblower program, and they can help you pursue a successful resolution of your case. Call the knowledgeable and dedicated whistleblower attorneys at Barrett Law PLLC today at 1 (601) 790-1505 to schedule your free, initial consultation.
