Whistleblower Complaints Under the Securities Exchange Act of 1934
Find Out What You Need to Know About Blowing the Whistle on Securities Fraud
Despite being nearly a century old, the Securities Exchange Act of 1934 continues to play a central role in the regulation of the securities markets in the United States. The Securities Exchange Act of 1934 is one of the primary statutes that the U.S. Securities and Exchange Commission (SEC) enforces, and it serves as the underlying source of authority for key SEC regulations, including Rule 10b-5.
It is also one of the primary statutes that applies in securities whistleblower cases.
If you have information about a violation of the Securities Exchange Act of 1934 or Rule 10b-5, it is important that you speak with a whistleblower lawyer about coming forward. At Oberheiden P.C., our securities whistleblower lawyers have extensive experience handling these types of cases. Not only does this include experience representing whistleblowers, but it also includes experience investigating and prosecuting securities fraud at the U.S. Department of Justice (DOJ). As a result, we have a clear understanding of what it takes to prove violations of the Securities Exchange Act of 1934, and we help you make informed decisions about your next steps.
Whistleblower Complaints Under the Securities Exchange Act of 1934
The Securities Exchange Act of 1934 contains several provisions critical to the SEC’s oversight of the U.S. securities markets. However, three sections tend to play a central role in enforcement cases (and whistleblower complaints) targeting private and publicly traded companies. These are:
Section 10
Section 10 (15 U.S.C. Section 78j) is perhaps the most important section of the Securities Exchange Act of 1934. This is the section that makes securities fraud a federal offense, and it also serves as the basis for Rule 10-5. In particular, Section 10(b) states:
“It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange . . . [t]o use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, or any securities-based swap agreement any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe . . . .”
The key phrase in Section 10(b) is, “agreement any manipulative or deceptive device or contrivance.” Rule 10b-5 uses similar (though not identical) language, prohibiting using any “device, scheme, or artifice to defraud.” Both of these phrases are extremely broad and allow for enforcement in cases involving fraud ranging from front-running and insider trading to manipulating corporate accounting records and disclosing misleading information to investors.
Section 12
Section 12 (15 U.S.C. Section 78l) establishes the registration requirements for securities offered publicly in the United States. Registration violations have become increasingly common in recent years. While there are exceptions to the Section 12 registration requirements, these exceptions only apply in very specific circumstances, and companies must generally structure and document unregistered offerings with a specific registration exemption in mind.
Section 13
Section 13 (15 U.S.C. Section 78m) establishes the reporting requirements for publicly traded companies. These include the requirements to file Form 10-K and Form 10-Q (among many others). Whistleblowers can report delinquent, falsified, misleading, and otherwise violative public filings—in addition to a wide range of other substantive and technical deficiencies.
To be clear, while these are among the most common issues raised in whistleblower complaints filed under the Securities Exchange Act of 1934, these are by no means the only issues that warrant coming forward. If you believe that you have information about any violation that would interest the SEC, we encourage you to contact us to discuss your next steps.
Put our highly experienced team on your side
Dr. Nick Oberheiden
Founder
Attorney-at-Law
Lynette S. Byrd
Former DOJ Trial Attorney
Partner
Brian J. Kuester
Former U.S. Attorney
Hon. Kevin McCarthy
55th Speaker, U.S. House of Representatives (ret.)
Government Consultant
Mike Pompeo
Of Counsel
Former U.S. Secretary of State
John W. Sellers
Former Senior DOJ Trial Attorney
Linda Julin McNamara
Federal Appeals Attorney
Nicholas B. Johnson
Former Prosecutor
Roger Bach
Former Special Agent (DOJ)
Chris J. Quick
Former Special Agent (FBI & IRS-CI)
Michael S. Koslow
Former Supervisory Special Agent (DOD-OIG)
Ray Yuen
Former Supervisory Special Agent (FBI)
About the SEC’s Whistleblower Program
The SEC relies heavily on whistleblowers to identify targets for investigations and enforcement proceedings. While the SEC has substantial investigative authority, it needs to know where to focus its efforts—and this is where whistleblowers come into play. The SEC’s whistleblower program is among the largest within the federal government, and the SEC has also issued many of the largest whistleblower rewards in U.S. history.
The following is just a small sampling of the types of issues the SEC targets through its whistleblower program:
- Corporate accounting fraud
- Fraudulent misrepresentations and omissions
- Front-running, insider trading, and other fraudulent schemes
- Registration and reporting federal securities laws violations
- Securities market manipulation
Whistleblowers seeking to disclose violations of the Securities Exchange Act of 1934 must strictly comply with the SEC’s disclosure requirements. This makes it critical to work with an experienced securities whistleblower lawyer who can communicate with the SEC effectively on your behalf.
What to Know About Contacting a Securities Whistleblower Lawyer at Oberheiden P.C.
With all of this in mind, what do you need to know about working with a securities whistleblower lawyer at Oberheiden P.C.? Here is what you can expect when you contact us about blowing the whistle under the Securities Exchange Act of 1934 or Rule 10b-5:
- We Will Maintain Strict Confidence – We will not disclose any of the information you provide to anyone (including the SEC) except with your express authorization.
- You Are Not Obligated to Blow the Whistle – Contacting us does not obligate you to come forward. Your initial consultation is completely free, confidential, and non-binding.
- We Will Help You Make Informed Decisions – We will determine if you are eligible to serve as an SEC whistleblower; and, if so, we will help you make an informed decision about whether to come forward.
- We Will Help Protect Your Identify – The SEC is one of the few federal agencies that allows whistleblowers to file complaints anonymously—though legal representation is required.
- You Will Not Pay Anything Out-of-Pocket – We do not charge any out-of-pocket legal fees or costs for whistleblower representation.
FAQs: Blowing the Whistle Under the Securities Exchange Act of 1934
How Do I File a Whistleblower Complaint Under the Securities Exchange Act of 1934?
Filing a whistleblower complaint under the Securities Exchange Act of 1934 involves submitting a formal complaint in accordance with the SEC’s substantive and technical requirements. While individuals can file complaints under the SEC’s whistleblower program directly, they can also file anonymously if they engage a lawyer to represent them. In any case, to ensure that you secure whistleblower status, protect your identity, and maximize your chances of obtaining a whistleblower reward, you will want an experienced lawyer on your side.
How Do I File a Whistleblower Complaint Under Rule 10b-5?
Filing a whistleblower complaint under Rule 10b-5 involves the same considerations and procedures as filing a whistleblower complaint under the Securities Exchange Act of 1934. This means that you will need to meet the requirements for submitting a valid complaint under the SEC’s whistleblower program; and, once again, it will be important for you to work with an experienced lawyer throughout the process.
How Much Information Do I Need to File a Whistleblower Complaint Under the Securities Exchange Act of 1934 or Rule 10b-5?
You do not need any specific amount of information to file a whistleblower complaint under the Securities Exchange Act of 1934 or Rule 10b-5. Rather, your complaint must contain sufficient information to warrant an SEC investigation based on the specific facts and circumstances at hand. If you are thinking about filing a whistleblower complaint with the SEC, our lawyers can help you determine whether you have adequate information to move forward.
Do I Need a Lawyer to File a Whistleblower Complaint Under the Securities Exchange Act of 1934?
While SEC whistleblowers are not required to have legal representation, hiring an experienced lawyer is strongly recommended for several reasons. It is also worth noting that you can hire a lawyer to file a whistleblower complaint under the Securities Exchange Act of 1934 at no out-of-pocket cost to you. At Oberheiden P.C., we do not charge any out-of-pocket costs or fees in federal whistleblower cases. Instead, we only get paid if we help our clients secure whistleblower compensation from the federal government.
Are Whistleblowers Under the Securities Exchange Act of 1934 Eligible to Receive Rewards?
Yes, whistleblowers who come forward under the SEC’s whistleblower program are entitled to receive a monetary award if their complaint leads to the recovery of at least $1 million. In cases under the Securities Exchange Act of 1934, whistleblowers can receive from 10% to 30% of the government’s recovery. The specific percentage is determined based on the volume of information and assistance a whistleblower provides, among other factors.
