Because of its experience in protecting consumers and investors, Stueve Siegel Hanson is well-suited to represent individuals who know about fraud and have the courage to speak up about it – these individuals are sometimes referred to as “whistleblowers.” A whistleblower may include:
- An employee who knows about ongoing securities fraud at his company;
- A pharmaceutical or other sales representative who knows about misrepresentations and other fraud concerning the products sold by her company; or
- An employee who knows that her company is defrauding the federal or state government, including in programs like Medicaid or Medicare.
It is not necessary to be an executive to be a whistleblower; often they are employees who work in accounting, marketing or other clerical and support positions within a company.
Under federal and state laws, whistleblowers may be entitled to receive a portion of any penalties or damages that the company has to pay because of its fraud. However, there are strict procedural requirements for sharing in these payments, and it is critical that a whistleblower consult with an attorney early in the process to make sure it complies with the procedures.
What is the SEC Whistleblower Program?
Congress created the Whistleblower Program to provide monetary incentives for individuals to come forward and report possible violations of the federal securities laws to the SEC. These individuals are entitled to between 10% and 30% of the monetary sanctions collected in actions brought by the SEC and related actions that may be brought by other regulatory and law enforcement authorities.
An individual who voluntarily provides the SEC with original information about a possible violation of the federal securities laws is considered an “eligible whistleblower.” The individual does not have to be an employee of the company to submit information about that company. For information to be provided voluntarily, it must be provided before the SEC requests it from you or your attorney or before Congress or another enforcement agency asks you to provide the information in connection with an investigation.
The information provided to the SEC must be original. Original information is information from your independent knowledge (not derived from publicly available sources) or independent analysis (not publicly known) that is not already known by the SEC.
To reap the monetary rewards, the information provided must lead to a successful SEC action resulting in an order of monetary sanctions exceeding $1 million. Your information satisfies the “led to” criterion if your information causes the SEC to:
- Open a new investigation;
- Re-open a previously closed investigation;
- Pursue a new line of inquiry in connection with an ongoing investigation;
- Bring successful enforcement action based at least in part on the information you provided.
Additionally, you may be eligible if you report your information internally first to your company, and the company later reports your information to the SEC, or reports the results of an internal investigation that was prompted by your information, as long as you also report directly to the SEC within 120 days.
The Whistleblower Program prohibits retaliation by employers against employees who provide the SEC with information. If you believe that your employer has wrongfully retaliated against you, you may bring a private action in federal court against your employer. If you prevail, you may be entitled to reinstatement, double back pay, litigation costs, expert witness fees, and attorneys fees. The SEC can also take legal action in an enforcement proceeding against any employer who retaliated against a whistleblower for reporting information to them.
If you feel you have information about a possible violation of the federal securities laws and want more information about the Whistleblower Program, contact Stueve Siegel Hanson by calling 1-800-714-0360 or 816-714-7100 or click here. All consultations are free and confidential.
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