The federal government has done an excellent job of incentivizing whistleblowers to come forward with information about securities laws violations in recent years, thanks to the numerous protections it has added for people who report this information. Now, record awards from the U.S. Securities & Exchange Commission and recent Supreme Court rulings have made it even more worthwhile for whistleblowers to report their information.
SEC awards increasing
The SEC has awarded more than $262 million to whistleblowers since 2012 in its whistleblower program. Many of these awards have come within the last year and a half.
Perhaps most noteworthy was the record award issued on March 19 by the SEC, in which a pair of whistleblowers shared a $50 million pot and a third whistleblower received a total of $33 million. Both of these awards destroyed the previous high mark of $30 million, and continued what has been a trend lately of increasing awards in SEC whistleblower cases. Whistleblowers now have plenty of financial reasons why they would submit their information to the SEC’s Office of the Whistleblower.
Several court cases have recently been crucial in bringing more whistleblowers forward, but perhaps none more so than Digital Reality Trust, Inc. v. Somers. In this case, the Supreme Court held Dodd-Frank’s anti-retaliation provisions only protect employees from retaliation who first give information about securities laws violations to the SEC. This means employees who only make internal reports through their company’s reporting processes without also alerting the SEC will not be able to benefit from anti-retaliation protections.
This decision essentially guaranteed that anyone who had actionable information would now come to the SEC rather than hoping their company would handle the matter internally, allowing them to benefit from federal whistleblower protections.
For more information on the benefits and protections afforded to those who assist the SEC, work with a dedicated whistleblower attorney at Kardell Law Group in Dallas.