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What You Need to Know About Filing an SEC Whistleblower Claim

The U.S. Securities and Exchange Commission’s (SEC) whistleblower program gives would-be tipsters an opportunity to earn a significant amount of money for reporting unique and actionable information on fraud and other wrongdoing in their companies or government agencies. Most recently the organization paid out $50 million to a pair of financial whistleblowers, but there have been plenty of high-profile awards made over the years.

To that end, if you have information to report to the SEC, what do you need to know? Here are some of the basics:

  • The information you have must be original and voluntarily provided: You will not be eligible to receive a whistleblower award through the SEC program if you provide information the SEC already had, or if you were compelled by some sort of investigation, demand or court order to provide that information.
  • Some people in certain roles are not eligible: Not just anyone is eligible for a whistleblower award. Attorneys, auditors, corporate officers and various compliance personnel are only allowed to participate in the program under very specific circumstances, those being a “reasonable belief” that SEC disclosure is necessary to prevent substantial damage to the entity or investors who would be harmed. These types of workers can also participate in the program if more than 120 days have passed since the whistleblower reported information internally to an audit committee, but the organization took no action.
  • You may be required to report internally first: There are some incentives for whistleblowers to use their own internal compliance programs before going to the SEC, but it will still take timely and high-quality tips directly. That being said, you should be aware of the risks associated with internal reporting, and seek legal representation for guidance through the process.
  • Have a clear case: Sometimes it is not just enough to have unique information. That information also has to be compelling. The more detailed your report and the more valuable the potential case, the more likely it is the SEC will take it on.

For further information on filing a claim with the SEC whistleblower program, work with an experienced attorney at Kardell Law Group.

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Testimonials
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

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