Blow The Whistle
And Do The Right Thing

At Fischer Legal Group, we help clients aggressively pursue justice in qui tam cases.

As the situation with the COVID-19 virus continues; we want you to know that we are available to all our clients for phone consultations.

SEC denies award to a whistleblower

On Behalf of | Jul 28, 2022 | Whistleblower Protection

Whistleblowers may be awarded between 10% and 30% of the funds recovered by government agencies. Of course, there are specific rules for getting that money, and one of them is that the whistleblower must voluntarily come forward with useful information for a successful enforcement action. On July 5, the SEC announced that it would not award the whistleblower because they were subpoenaed and had already offered testimony in the investigation.

Guidelines for eligibility

Eligible whistleblowers must submit their information in the manner and form required by the agency – online through the SEC website or by mailing or faxing a Form TCR (Tip, Complaint or Referral). The commission may require more information from the whistleblower, who must cooperate. The SEC defines this as:

  1. The whistleblower must provide adequate explanation and assistance so the SEC can accurately evaluate the information
  2. They must provide any additional information requested if it is in their possession
  3. They must offer truthful and complete testimony, perhaps in follow-up meetings.
  4. They must observe a confidentiality clause if the information shared by the SEC is not common knowledge.

Not meeting the above criteria is grounds for ineligibility.

Claimant appeals preliminary determination

The SEC has sole discretion to waive the protocols if the whistleblower’s information merits it, but it did not do so with this claimant. The claimant followed protocol and appealed the SEC’s preliminary determination to the claims review staff, arguing that their testimony reopened the case and sent investigators in a new direction. The claimant further argued that the testimony that reopened the case was unavailable to them when they initially testified.

What is the next step?

Despite issuing about $1.2 billion in awards in the last ten years to 268 whistleblowers, the SEC released a statement after reviewing the appeal that announced that the final determination was no award in this case. The next step for the whistleblower is to take their case to the United States Court of Appeals within 30 days of the SEC issuing its final decision.