The SEC Whistleblower Program was introduced as an amendment to the Dodd-Frank Consumer Protection Act, which seeks to protect consumers against violations by companies and businesses. With the program, it has become easier to locate factual information about the violations perpetrated by companies and individuals, simply because more and stringent security measures have been introduced.
Before the 2010 amendment to the Consumer Protection Act, whistleblowers were not able to report violations for fear of victimization, or the reporting capabilities available then were not adequate. These are some of the things that inspired the introduction of the SEC Whistleblower program, which has since streamlined the business world by eliminating securities violations.
Among concerns raised during the draft of the amendment is the fact securities fraud is an issue that cannot be confined to one demographic, so it was necessary to come up with laws that would allow for international reach. The SEC Whistleblower Program allows for international reporting, so it does not necessarily matter whether you are located within the U.S. or not. In fact, since 2010, many reports that were submitted to the SEC came from other jurisdictions.
The Annual SEC Report cited that 10.8 percent of the reports received were from jurisdictions outside the U.S. Some of the countries where this information came from include China, Venezuela, India, Italy, Canada, South Africa, Norway, Israel and Spain to name a few.
Sanctions to perpetrators and awards to whistleblowers
Punitive measures have also been heightened to ensure those caught violating securities laws are made to understand the message the government is trying to share. In this regard, the SEC Whistleblower Program has outlined laws that spell out how those who violate the laws are sanctioned and the amounts they are supposed to pay.
Additionally, whistleblowers will receive a package and honor for playing their part in curbing securities violations. This package will include a share of the total sanctions collected calculated as a percentage depending on the severity of the case and other factors. Whistleblowers receive as much as 30 percent compensation and in other cases where the issue reported is too technical there is a special package that includes the payment of between $4 and $5 million.
Law firms like Labaton Sucharow have also joined in this race to ensure whistleblowers are advised about the position of the law before reporting. This allows them to engage in honest reporting to ensure no party is implicated wrongly. Learn more about the SEC Whistleblower lawyers