The Whistleblower Reward
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), a whistleblower who provides original information to the SEC or CFTC that leads to a successful enforcement action resulting in over $1 million in monetary sanctions may be awarded by the SEC or CFTC an amount not less than 10% and not more than 30% of the monetary sanctions collected.
The determination of the amount of the award is within the discretion of the SEC or CFTC as long as the award falls within the 10% to 30% range. Notably, the total reward cannot exceed 30% even when the SEC or CFTC distributes the reward to more than one whistleblower.
In determining the percentage reward to grant to the whistleblower, the SEC and CFTC consider a number of factors that can increase or decrease the amount to be distributed. Factors that can increase an award include whether the whistleblower reported the violations through an entity’s internal-compliance program, the significance of the information provided by the whistleblower, the degree of assistance provided by the whistleblower to the SEC or CFTC, and the SEC or CFTC’s programmatic interest in deterring the securities or commodities law violations at issue. Factors that can decrease a reward include the level of culpability of the whistleblower in the wrongdoing, unreasonable delay on the part of the whistleblower in reporting the violations to the SEC or the CFTC, or the whistleblower’s interference with internal compliance and reporting systems. When the whistleblower is also culpable, the SEC and CFTC will exclude from the reward any monetary sanctions that the whistleblower is ordered to pay individually or that an entity is ordered to pay based substantially on the conduct of the whistleblower.
A whistleblower can appeal the denial of an award directly to a federal court of appeals, but cannot appeal the determination of the amount of an award that conforms with the program’s dictates. Any appeal must be made within 30 days of the determination.
The Law Office of Jeffrey M. Haber is dedicated to providing experienced, dedicated, and aggressive representation for whistleblowers looking to report violations of the federal securities and commodities laws to the SEC or CFTC. If you have questions about your eligibility as a whistleblower under the SEC Whistleblower Program or CFTC Whistleblower Program and the reward that you may be eligible to receive, contact Jeffrey M. Haber.