SEC Whistleblower Awards

The U.S. Securities and Exchange Commission (SEC) Issues Awards to Whistleblowers Who Report Corporate Fraud, Investment Fraud, and Financial Crimes

Lynette Byrd
Attorney Lynette Byrd
SEC Whistleblower Award Team Lead
Former DOJ Attorneyenvelope iconContact Lynette
Nick Oberheiden
Attorney Nick Oberheiden
SEC Whistleblower Award Team Leadenvelope iconContact Nick
Tim Allen
Tim Allen
SEC Whistleblower Award Team
Former Secret Service (Digital Forensics Expert)
Brian Kuester
Attorney Brian Kuester
SEC Whistleblower Award Team
Former U.S. Attorney and District Attorneyenvelope iconContact Brian

Like other federal law enforcement agencies, the U.S. Securities and Exchange Commission (SEC) relies heavily on whistleblowers. The SEC is tasked with uncovering corporate accounting violations, fraud on the market, and other similar forms of wrongdoing—and, in many cases, it can only do so if it receives information from insiders.

As a result, the SEC manages one of the most active Whistleblower Programs within the federal government. In addition to providing strong protections to whistleblowers, the SEC also rewards those who come forward with information that leads to successful enforcement actions. If you believe that you have information that would be of use to the SEC and are interested in seeking an SEC whistleblower award, our whistleblower lawyers can help you make informed decisions about your next steps.

SEC Whistleblower Awards: Eligibility and Amounts

The SEC issues whistleblower awards under the Dodd-Frank Act. Enacted in 2010, the Dodd-Frank Act was intended as a preventive measure to avoid a repeat of the financial crisis of 2008. In addition to establishing new corporate accounting requirements and instilling various other checks designed to ensure that corporations and lenders do not engage in excessively risky practices that threaten investors’ savings or the overall stability of the U.S. markets, the Dodd-Frank Act also laid the groundwork for the SEC’s Whistleblower Program. The SEC launched its Whistleblower Program a year later, on August 12, 2011.

Since then, the SEC has awarded approximately $2 billion to whistleblowers. In the government’s 2023 fiscal year alone, the SEC awarded nearly $600 million to 68 individual whistleblowers. As the SEC explained in its Annual Report to Congress for Fiscal Year 2023, this is “the highest annual total by dollar value in the Program’s history,” and it includes “a single award for almost $279 million—the largest in the history of the Program.” It also includes an award of $104 million issued to a group of whistleblowers who came forward to report corporate fraud across multiple jurisdictions, as well as three additional awards of $20 million or more.

While the Dodd-Frank Act created the SEC’s Whistleblower Program, the SEC’s enforcement efforts under the program are not limited to Dodd-Frank Act violations. Whistleblowers can—and do—report all forms of corporate fraud, investment fraud, and other financial crimes to the SEC. In all cases, SEC whistleblower awards range from 10 to 30 percent of the amount the SEC recovers based on the information a whistleblower provides, as long as the SEC’s recovery is $1 million or more. The SEC reports receiving whistleblower complaints involving the following issues, among others:

  • Market manipulation
  • Fraudulent securities offerings
  • Fraudulent initial coin offerings (ICOs) and crypto asset securities
  • Corporate disclosure violations and financial fraud
  • Insider trading
  • Trading and pricing fraud
  • Unregistered offerings
  • Fraudulent market events
  • Foreign Corrupt Practices Act (FCPA) violations
  • Municipal securities and public pension fraud

In 2020, the SEC adopted a new rule that presumes the maximum award of 30 percent should apply in most cases where a whistleblower’s award would be $5 million or less. When this presumption does not apply, the SEC considers seven factors when determining the appropriate percentage for a whistleblower award. This includes four “positive factors” that may increase an SEC whistleblower award and three “negative factors” that may suggest an award on the lower end of the range is appropriate:

Positive Factors that Support a Higher SEC Whistleblower Award

  • The Significance of the Information the Whistleblower Provides – According to the SEC, “[t]his is a critical driver of the award percentage and, in certain circumstances, could be the most important factor when apportioning award amounts . . . as the Commission often focuses on the relative significance (and timing) of . . . whistleblowers’ submissions.”
  • The Level of Assistance the Whistleblower Provides – Beyond submitting information in a whistleblower complaint, the SEC also relies on whistleblowers to provide assistance with the Commission’s ensuing investigation. The more assistance whistleblowers provide, the more likely they are to receive the maximum SEC whistleblower award of 30 percent.
  • The Level of the SEC’s “Law Enforcement Interest” – The SEC’s interest in pursuing a whistleblower’s complaint is also a key factor in determining the amount of the whistleblower’s award. As the SEC explains, “[t]he law enforcement interest may be high when the whistleblower provides information about ongoing violations that are harming investors . . . [or] for securities violations with elements occurring abroad.”
  • Whether the Whistleblower Reported the Fraud Internally – As the SEC also explains, “[w]hile claimants are not required to report internally, their award percentage may be increased if they do so.” This is because the SEC encourages voluntary self-compliance, and it has a greater interest in punishing organizations that knowingly fail to rectify (or continue to engage in) fraudulent conduct.

Negative Factors that Support a Lower SEC Whistleblower Award

  • An Unreasonable Delay in Filing a Whistleblower Complaint – An unreasonable delay in reporting fraud or other misconduct to the SEC can result in reduction of the whistleblower’s award. In its annual report, the SEC writes that it “reduced the ward percentages of five whistleblowers who unreasonably delayed in reporting.”
  • The Whistleblower’s Personal Culpability – While individuals who personally participate in fraud or other misconduct may be eligible to receive SEC whistleblower awards, personal culpability can reduce the amount of an individual’s award.
  • Interference with Internal Reporting Systems – If a whistleblower interferes with an organization’s internal reporting systems in order to file a whistleblower complaint with the SEC, this can also result in a reduction in the percentage of the whistleblower’s award.

SEC whistleblower award eligibility is not limited to U.S. residents and citizens. As of 2023, the SEC reports accepting whistleblower complaints from individuals located in countries including Australia, Canada, Germany, India, and the United Kingdom. Within the United States, the SEC reports that the jurisdictions with the most whistleblower complaints filed are California, Florida, New York, South Carolina, and Texas. As a result, regardless of where you live, if you believe that you may have information that would be of interest to the SEC, you should consult with an SEC whistleblower lawyer promptly.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

FAQs: SEC Whistleblower Complaints and Awards

How Do I Apply for an SEC Whistleblower Award?

Obtaining an SEC whistleblower award is a multi-step process. First, you must properly submit a formal whistleblower complaint in accordance with the Dodd-Frank Act and the SEC Whistleblower Program’s submission procedures. Then, you must cooperate with the SEC’s investigation and subsequent enforcement efforts. Finally, if the SEC’s enforcement efforts prove successful, you must apply for your compensation award from the SEC. Our federal whistleblower lawyers can assist with each step in the process.

What Is the Minimum SEC Whistleblower Award?

In all cases, the SEC bases whistleblower awards on the amount that it recovers as a result of a whistleblower’s assistance. It also determines the percentage of a whistleblower award based on the scope of the whistleblower’s assistance, among other factors. Technically, the minimum SEC whistleblower award is $100—or 10 percent of $1 million, which is the threshold recovery for award eligibility. However, most SEC whistleblower awards are significantly higher.

Am I Guaranteed an Award if I File a Whistleblower Complaint with the SEC?

No, you are not guaranteed a whistleblower award when you file a complaint with the SEC. The SEC only issues whistleblower awards when the information a whistleblower provides leads to a successful enforcement action. If you are thinking about blowing the whistle with the SEC and want to know your likelihood of receiving an award, our lawyers can provide a comprehensive assessment based on the information you have in your possession.

How Common Are SEC Whistleblower Awards?

The SEC issued 68 whistleblower awards in FY 2023, and it has issued a total of 397 whistleblower awards since launching its Whistleblower Program in 2011. The SEC reports receiving more than 18,000 whistleblower tips in FY 2023. While SEC whistleblower awards are relatively uncommon in comparison to the total number of complaints the Commission receives, it also reports that the number of awards issued has increased consistently since the launch of its Whistleblower Program.

Should I Hire a Lawyer to File a Whistleblower Complaint with the SEC If I Am Seeking an Award?

If you are thinking about contacting the SEC and are interested in seeking a whistleblower award, we strongly recommend that you hire an experienced lawyer to represent you. At Oberheiden P.C., we have extensive experience representing federal whistleblowers, and we provide legal representation at no out-of-pocket cost.


Schedule a Confidential Initial Consultation with an SEC Whistleblower Lawyer at Oberheiden P.C.

If you would like to know more about filing a whistleblower complaint with the SEC and seeking an SEC whistleblower award, we invite you to schedule a confidential initial consultation at Oberheiden P.C. We represent SEC whistleblowers throughout the U.S. and internationally. To speak with a senior SEC whistleblower lawyer as soon as possible, please call 888-680-1745 or request an appointment online today.

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