SEC Whistleblower.

By: Jeffrey M. Haber “Ensuring that potential whistleblowers can communicate directly with the Commission is a critical part of the SEC’s oversight mandate” On numerous occasions, we have written about the Securities and Exchange Commission’s (“SEC” or the “Commission”) whistleblower program and, in particular, the success of the program with respect to detecting and preventing violations of the federal securities laws. The success of the program depends, in large part, on th

By:  Jeffrey M. Haber Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 21F to the Securities Exchange Act of 1934 (“Exchange Act”), establishing the Securities and Exchange Commission’s whistleblower program. Among other things, Section 21 authorizes the SEC to make monetary awards to individuals who voluntarily provide original information that leads to successful SEC enforcement actions resulting in monetary sanctions exceeding $1

By: Jeffrey M. Haber The new year is days old, but that has not stopped the Securities and Exchange Commission (“SEC” or “Commission”) from awarding whistleblowers money under the Commission’s whistleblower program. During the past two weeks, the SEC announced that it awarded, in total, more than $14 million to several whistleblowers who provided information and assistance in three enforcement actions – one for “misconduct occurring overseas” and a second where the whistleblo

By: Jeffrey M. Haber On September 15, 2021, the Securities and Exchange Commission (“SEC” or “Commission”) announced ( here ) that it paid approximately $110 million and $4 million to two whistleblowers whose information and assistance led to successful SEC and related actions. With these awards ( here ), the SEC’s whistleblower program has now paid more than $1 billion in awards to 207 whistleblowers, including over $500 million in fiscal year 2021 alone. The $110 million aw

Whistleblowers play an important role in detecting and stopping securities laws violations. They do so often by risking their career and reputation. For this reason, whistleblowers may receive a monetary award for bringing to the attention of the SEC credible information about possible securities fraud and other violations of the securities laws, including the Foreign Corrupt Practices Act.  The SEC derives its authority to reward whistleblowers from the Dodd-Frank Wall Stree

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) to combat illegal and fraudulent conduct on Wall Street and promote compliance with the federal securities and commodities laws.  The Dodd-Frank Act contains whistleblower provisions that authorize the Securities and Exchange Commission (“SEC” or the “Commission”) to pay substantial cash rewards to whistleblowers who voluntarily provide the SEC with information about

Retaliation is the primary concern among those who decide to blow the whistle on wrongdoing. It represents a significant impediment to obtaining the primary goals of whistleblowing:  accountability and transparency of government and corporate activities. According to a 2010 government survey of federal employees, “approximately one-third of the individuals who felt they had been identified as a source of a report of wrongdoing also perceived either threats or acts of reprisal

Recently, this Blog wrote about the success of the Commodity Futures Trading Commission’s (“CFTC”) Whistleblower Program ( here ).  As noted in that post, over the course of a few weeks, the CFTC had paid whistleblowers more than $45 million in awards. (The CFTC press release announcing the award can be found here .) Despite the positive direction in which the CFTC Whistleblower Program has been moving, many believe the whistleblower programs run by the CFTC and the Securiti

Former Tesla, Inc. ("Tesla") (NASDAQ: TSLA) employee, Martin Tripp ("Tripp"), has been sued in Nevada federal court by the car behemoth for allegedly hacking into the company’s manufacturing system and sharing trade secrets, claiming that he had tried to sabotage the company. Tripp denies wrongdoing, contending that he was trying to alert the public about alleged improper practices that the company was engaging in, including using punctured batteries in cars, making excess w

On February 21, 2018, the United States Supreme Court ruled that the anti-retaliation protections passed by Congress after the 2008 financial crisis extend only to individuals who report suspected violations of the securities laws to the Securities and Exchange Commission (“SEC” or “Commission”). In Digital Realty Trust, Inc. v. Somers , 583 U.S. _____ (2018) ( here ), the Court held that individuals who blow the whistle through internal means only are precluded from the anti

On November 28, 2017, the United States Supreme Court heard arguments ( here ) in Digital Realty Trust v. Sommers , a case that will determine whether employees who report suspected violations of the securities laws internally can file suit against their employers under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act” or “Dodd-Frank”) for retaliation, even if they do not report their concerns to the Securities and Exchange Commission (“S

On Monday, June 26, 2017, the United States Supreme Court agreed to consider whether the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act” or the “Act”) extends to individuals who have not reported alleged misconduct to the Securities and Exchange Commission (“SEC”) and, thereby, fall outside the Act’s definition of “whistleblower.” Digital Realty Trust v. Somers , 16-1276. In Digital Realty Trust v. Somers

Yesterday, the House of Representatives voted along party lines to repeal many of the regulations enacted after the 2008 financial crisis under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). It was the first step for Republicans who have long-promised to eliminate regulations they maintain are hurting banks, restricting consumer credit, inhibiting small businesses, and slowing economic growth. The legislation faces significant hurdl

After the 2016 presidential election, President Trump promised to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), and the regulations promulgated thereunder. ( Here .) The president, however, was silent on whether he intended to alter the Securities and Exchange Commission’s whistleblower program. ( Here .) Last year, House Financial Services Committee Chairman Jeb Hensarling sponsored the Financial CHOICE Act , as a road m

In February, the Royal Bank of Scotland was hit with a $85 million civil penalty by the U.S. Commodity Futures Trading Commission ("CFTC") in connection with the bank's attempted manipulation of a benchmark tied to U.S. dollar based swap transactions over a five-year period from January 2007 through March 2012. The commodities watchdog found that RBS bid, offered and executed transactions that were pegged to the U.S. Dollar International Swaps and Derivatives Association Fix

Last year, this Blog wrote a number of articles about the Securities and Exchange Commission’s (“SEC” or the “Commission”) efforts to stop companies from impeding whistleblowers from reporting violations of the securities laws to the Commission. ( See here , here , and here .) It looks like 2017 is picking up where 2016 left off. Last week, the SEC announced the settlement of two enforcement actions ( here and here ) against companies that impeded protected whistleblower ac

On January 23, 2017, the SEC announced that it awarded more than $7 million to three whistleblowers who came forward with information that led to a successful SEC enforcement action.  One whistleblower provided information that the SEC considered to be the primary impetus for the start of the Commission’s investigation.  Consequently, the SEC awarded more than $4 million to that whistleblower.  The other two whistleblowers split more than $3 million for jointly providing new

Being a whistleblower is not easy. It involves personal sacrifice and professional risk. Many violations of the law go unreported, especially in the workplace, because people who know about them are afraid of being disciplined, losing their job, being demoted, or being passed over for promotion. Recognizing the financial, reputational and professional risks associated with whistleblowing, Congress included in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 20