Why an SEC Whistleblower Lawyer Matters: $6 Million Award Highlights Program’s Power

SEC Whistleblower Lawyers Secure $6 Million Award

On April 21, 2025, the Securities and Exchange Commission (“SEC”) announced a $6 million award to joint whistleblowers who disclosed information that launched an examination and provided a clear framework that contributed to a successful enforcement action.

“Today’s award illustrates that the agency can leverage whistleblower information in various ways, including by prompting an examination,” said Jonathan Carr, the Acting Chief of the SEC’s Office of the Whistleblower.  “If that examination ultimately results in an enforcement action, the whistleblower may be eligible for an award.”

Whistleblower payments come from a fund created by Congress to protect investors.  This fund is entirely supported by financial penalties paid by violators of securities laws. Whistleblowers may receive awards if they voluntarily submit original, timely, and credible information that directly contributes to a successful enforcement action.  Awards can range between 10% and 30% of the monetary penalties collected, provided the total sanctions exceed $1 million.

What is a Whistleblower and What Information Can I Submit to the SEC?

According to the SEC, a whistleblower is an individual who voluntarily provides the SEC with original information in writing regarding “a possible violation of the federal securities laws that has occurred, is ongoing, or is about to occur.”  One or more people may act as a whistleblower, but companies or organizations cannot qualify as whistleblowers.  A whistleblower does not need to be an employee of the company in order to submit information about that company.

After receiving a tip or complaint, the SEC conducts investigations into potential violations of the federal securities laws.  Generally, whistleblower tips that are more specific, credible, and timely are more likely to be forwarded to investigative staff for further follow-up or investigation.  For example, if a tip identifies individuals involved in the scheme, provides examples of specific fraudulent transactions, or points to non-public materials as evidence of the fraud, the tip is more likely to be assigned to Enforcement staff for investigation.

Examples of conduct that the SEC is interested in investigating include Ponzi schemes, Pyramid schemes, theft, insider trading, fraudulent or unregistered securities offering, abusive naked short selling, bribery of foreign officials, fraudulent or misleading statements about a company, and other fraudulent conduct involving securities.

What Protections Exist for Whistleblowers Under the Dodd-Frank Act?

Created in the wake of the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) sought to protect US consumers and taxpayers.  It established a variety of new government agencies tasked with overseeing the financial system and restricted how banks invest and deal with hedge funds and private equity firms.

The Dodd-Frank Act also expanded whistleblower protections and limitations against retaliation.  In light of this, the SEC enacted rules enabling the SEC to take legal action against employers who retaliate against whistleblowers.  In fact, according to the SEC, employees who have reported a possible securities law violation in writing and believe they have been retaliated against because of their report “may be able to sue [their] employer in federal court and seek double back pay (with interest), reinstatement, reasonable attorneys’ fees, and reimbursement for certain costs in connection with the litigation.”  Moreover, as part of the Dodd-Frank Act, the SEC maintains strict confidentiality for whistleblowers and does not release any details that could reveal their identities.

What is the SEC’s Whistleblower Program?

Established by Congress, the SEC’s whistleblower program incentivizes whistleblowers to timely report information regarding potential federal securities laws violations.  Whistleblowers can submit tips, complaints, and referrals using the SEC’s online portal.

Why is it Important to Work with an Experienced SEC Whistleblower Lawyer?

The process of submitting a whistleblower tip can be lengthy and complex.  Skilled SEC whistleblower attorneys can guide you through this process

The team at Miller Shah understands that becoming a whistleblower can be a risky and scary step.  In recognition of the important role whistleblowers play in society, Miller Shah is committed to protecting whistleblowers from retaliation in all forms and working to achieve optimal outcomes.  The whistleblower attorneys at Miller Shah have extensive experience supporting whistleblowers and navigating the complex process of reporting SEC violations.  We employ a team-oriented approach that leverages the diverse experience of our attorneys.

By giving whistleblowers the individual attention they deserve, we ensure that whistleblowers understand their rights and protections under the law, tailor a bespoke strategy based on unique facts, and provide the necessary legal guidance and emotional support.  Our team is by your side through every stage of the process, from initial consultation to final resolution.