How Do I Disclose
Financial Fraud to the SEC?
Am I required to have an attorney to provide information to the SEC?
Actually, no. Anyone can complete the Form TCR and submit it to the SEC.
How can an attorney help me prepare my submission?
While it is theoretically possible for an individual to submit information to the SEC, retaining counsel is advisable for a number of reasons. First and foremost, an attorney experienced in securities issues will be able to craft your disclosure in a way that will make your claim more appealing and easily discernible to the SEC.
I’m an experienced finance, accounting, or compliance professional. I know about the fraudulent conduct and can articulate it clearly for the SEC. Do I really need to have an attorney help me?
Absolutely. Individuals performing a finance, accounting, or compliance function may have additional procedural hurdles to jump through. This could include making internal disclosures before contacting the SEC or waiting for a defined period of time before bringing their information to the Commission. Even if (or, especially if) you are an expert in the field, you should speak with an attorney who is experienced working with SEC whistleblowers.
What if I’m concerned about being complicit in the fraud? Do I have anything to worry about?
That depends. Simply because you came forward with information will not necessarily shield you from liability. This is typically true if you were the brains behind the fraudulent scheme or if you took significant steps to help your company further it. This is perhaps one of the strongest reasons to retain counsel. An experienced attorney can work with you and with the SEC to help minimize your exposure while working with the SEC.
What happens after I disclose information to the SEC?
Usually, the SEC will take some time to investigate your matter before contacting you or your attorney. If your tip seems to have some merit, you may be called in to an interview with the SEC or asked to provide more documentation. This is another area where an attorney can help you – both by helping you prepare and organize your documentation so that it is more accessible for the SEC and with assisting you to prepare for and participate in follow-up interviews with the SEC’s attorneys.
Am I allowed to remain anonymous when I provide information to the SEC?
Yes and no. The regulations provide that an individual can provide information anonymously only if he or she is represented by an attorney. Even then, you may eventually need to disclose your identity to the SEC. This is true if the SEC needs to interview you or in the event that you want to claim a reward. Even still, the SEC takes whistleblower anonymity very seriously and will work to protect your identity, even after issuing you an award.
How does the SEC determine my reward?
The SEC relies on a number of criteria for determining an award. You can view this criteria in full along with a detailed explanation at our What is A Whistleblower? site. Generally, the SEC will look at the quality of the information that you provided, the degree of assistance that you were able to offer, and the interest that the SEC has in the type of fraud that you have articulated.
What if I’m unhappy with the award that the SEC has given me as a result of my information?
You need to first understand that issuing a reward is at the SEC’s discretion. Even still, the regulations provide that an individual who is unhappy with the size of his or her reward may appeal the award decision. It is especially important to have an attorney represent you during this process.
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On March 4, 2014, in Lawson v. FMR LLC, the Supreme Court drastically expanded the class of potential whistleblowers protected under the Sarbanes-Oxley Act (SOX). In doing so, the Court’s opinion set a generous tone for the interpretation of other disputed whistleblower statutes.
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