Answers to Common Questions Regarding the SEC Whistleblower Program
Introduced through the 2010 Dodd-Frank Consumer Protection Act, the SEC Whistleblower Program has revolutionized the fight against securities violations. The program has unlocked the ability to report violations from any part of the world and whistle-blowers are secured from unnecessary threats. More specifications have been included in the program, thereby enhancing the reporting capabilities of whistleblowers.
Since its establishment, more cases of securities violations have been forwarded and companies have become more aware of the fact that acting as required by the law is mandatory. To further understand what the SEC Whistleblower program represents, here are answers to questions raised by many people.
Who is a whistleblower and is there criteria under the program?
Under the SEC Whistleblower Program, any individual or group who forwards information to the SEC about violations of securities laws, is referred to as a whistleblower. While most whistleblowers are employees of certain entities, anyone with the capacity to provide factual and verifiable information is welcomed to share details with the SEC about any violations of securities laws. This goes beyond citizenship as the new program allows international submissions.
Must whistleblowers reveal their identity publicly when reporting?
Before the introduction of the 2010 Dodd-Frank amendment, people with useful information about violations would fail to report simply because they feared falling victims of victimization. This is no longer a threat since the SEC Whistleblower Program is designed to protect whistleblowers while fighting securities violations. The program introduced anonymous reporting, which is a big achievement that has opened the doors of reporting for whistleblowers and allowed them to enjoy maximum security while at it.
Are there employment protections for employees who report violations?
Indeed, most employers retaliate when their employees report about securities violations. Today, this is no longer a threat to employees since it is a criminal offense to threaten, sue, demote or act in a demeaning manner to an employee who reports about securities violations. If an employer tries to retaliate and this is confirmed, the employee may sue the employer and will be served free legal representation courtesy of the SEC.
What monetary rewards are whistleblowers paid?
To motivate whistleblowers, the SEC has also introduced a rewards system. Initially, whistleblowers would be paid between 10 and 30 percent of the sanction amount received from the company in question, but from 17th May, 2016, the SEC is issuing upwards of 5$ to $6 million depending on the relevance of the information submitted.