Offices in:

  • Washington
  • London
  • San Francisco
  • Miami
  • New York

SEC and CFTC whistleblower programs: An overview

SEC whistleblower lawyers and CFTC whistleblower lawyers at Phillips & Cohen can help individuals report wrongdoing confidentially and receive a reward.

Both US citizens and foreign nationals may file whistleblower claims and receive rewards.

Whistleblowers who report wrongdoing to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) may receive a reward if government enforcement agencies recover more than $1 million as a result of the whistleblower’s information. SEC and CFTC whistleblowers also are entitled to job protection.

Phillips & Cohen secured for one of its clients an SEC award of $32 million for information and assistance that exposed and stopped a massive securities fraud. It is the largest SEC whistleblower reward made under the Dodd-Frank program.

The Dodd-Frank Wall Street Reform and Protection Act, known as the Dodd-Frank Act, created the SEC whistleblower reward program and a CFTC whistleblower reward program in 2010.

Here are the main aspects of the SEC and CFTC whistleblower programs under the Dodd-Frank Act. For more information about the CFTC program, see our CFTC whistleblower reward program page.

  • Whistleblower rewards: Whistleblowers will receive a reward of 10 percent to 30 percent based on the amount the SEC and CFTC collects as a result of the whistleblower’s information, if more than $1 million is collected. Once the SEC recovers more than $1 million, recoveries in related cases by other agencies also are counted toward the whistleblower award. The law says certain factors will be considered to determine the whistleblower’s reward:
    • The significance of the information provided.
    • The assistance provided by the whistleblower and the whistleblower’s attorney.
    • The “programmatic interest” of the SEC “in deterring violations of the securities law.”
  • Job protection: The Dodd-Frank Act specifically states that employers may not fire, demote, suspend, threaten, harass, or discriminate against an individual who provides information to or assists the SEC. Whistleblowers who suffer from employment retaliation may sue for reinstatement, back pay and any other damages that occurred. In an important decision, a US Court of Appeals recently ruled that the anti-retaliation provisions of Dodd-Frank extend to those who report their concerns internally and are fired before they go to the SEC.
  • Confidentiality: Whistleblowers may report fraud anonymously, as long as they have retained a lawyer to represent them. In some cases, their identities may remain unknown even to the SEC until the time comes for the payment of a reward. This is the strongest confidentially provision available out of any of the federal whistleblower programs, including “qui tam” cases under the False Claims Act and the Internal Revenue Service (IRS) whistleblower program. See “Can the SEC Be Trusted to Protect a Whistleblower’s Identity?” written by Phillips & Cohen partner Erika A. Kelton.

SEC whistleblower claims that have been filed with the SEC include allegations of money laundering, accounting fraud, mispricing of stock and violations of the Foreign Corrupt Practices Act (FCPA). Phillips & Cohen has experience representing whistleblowers in cases involving complex financial transactions and other corporate fraud. We have filed many whistleblower claims with the SEC and CFTC under the Dodd-Frank whistleblower reward programs and are working closely with enforcement officials on a number of them. In other government rewards programs, we have represented the whistleblower who exposed yield-burning in the municipal bond market, for example, as well as a Wall Street banker who exposed fraudulent tax shelters involving more than $10 billion of taxable income.

If you are aware of any corporate fraud, securities violations or FCPA violations and would like to discuss your options under the SEC or CFTC whistleblower programs, please  contact Phillips & Cohen to discuss the matter at no charge.

Let us help you.
Get a free, confidential case review