Phillips & Associates

SEC Bounty Program

New York City Attorneys Assisting Employees in Reporting SEC Violations

The Securities and Exchange Commission (SEC) runs an SEC bounty program that was established to incentivize employee reporting of securities law violations under the Dodd-Frank Act and the Sarbanes-Oxley Act. The program allows qualifying whistleblowers to recover 10-30% of the sanctions after a successful SEC enforcement action. As a result of the SEC bounty program, there has been an increase in tips related to fraud at public companies. If you are interested in providing a tip about your employer through the SEC bounty program, it may be wise to consult the New York City whistleblower lawyers at Phillips & Associates.

Awards Under the SEC Bounty Program

The SEC greatly benefits from getting information and assistance from whistleblowers who know of and report possible securities law violations. Whistleblowers help the SEC identify fraud and other violations earlier than they might otherwise come to light. This early knowledge allows the harm to investors to be minimal. It can also allow the SEC to more quickly hold accountable those responsible for illegal behavior.

The SEC has the authority to give monetary awards to whistleblowers who give them high-quality original information that leads to a successful enforcement action that results in more than $1 million in sanctions. The award will be 10-30% of the monetary sanctions.

The SEC was given limited authority to give awards to whistleblowers in connection with insider trading more than two decades ago. However, the SEC bounty program was expanded by the Dodd-Frank Act. Section 922 of Dodd-Frank amended the Securities Exchange Act of 1934. The amendment allows for the Whistleblower Bounty Program. The SEC is obliged under Dodd-Frank to pay an award of 10-30% of the monetary sanctions collected in an enforcement action to someone who voluntarily gives original information to the SEC that is derived from the whistleblower's independent analysis or knowledge. If someone else gives information to the SEC, the whistleblower can still be eligible if the whistleblower is the original source of the information.

Whistleblowers need to come forward voluntarily. In other words, you need to provide the original information before the SEC asks for information related to that information and before any similar requests are made by the Public Company Accounting Oversight Board, a state Attorney General, or another authority of the federal government. Moreover, the original information cannot be known to the SEC from another source except when you are the original source of the information. This information cannot be exclusively derived from a claim made in an administrative or judicial proceeding. Moreover, your submission needs to lead to a successful SEC administrative or judicial action resulting in monetary sanctions of over $1 million.

To determine how much the bounty should be, the SEC is supposed to look at how significant the information given by the whistleblower was and how much help was provided. It is also supposed to consider the interest of the SEC in deterring securities violations.

Retaliation Protections

Moreover, obtaining a bounty comes with protection from retaliation by an employer. Under Dodd-Frank, employers cannot terminate you, demote you, threaten you, harass you, or suspend you based on a legal action taken by you, such as helping the SEC in an enforcement action or making disclosures mandated by federal securities laws. If you successfully prove retaliation, you will be entitled to back pay, reinstatement, and other remedies. Under Dodd-Frank, as interpreted by the Supreme Court, you must disclose the original information to the SEC to recover a bounty.

Seek Guidance from a Skillful Whistleblower Lawyer in New York City

If you are considering disclosing information about misconduct in a New York City workplace to the SEC, you should contact an attorney who has handled these claims and can advise you on the steps to take. You can contact Phillips & Associates at (212) 248-7431 or through our online form for a free consultation. We handle employment litigation in the boroughs of the Bronx, Queens, Brooklyn, and Manhattan; the counties of Westchester, Nassau, and Suffolk; as well as New Jersey, Connecticut and Pennsylvania.

45 Broadway, #620,
New York NY, 10006
Tel: 212-248-7431
Fax: 212-901-2107

Client Reviews
I was a client with this law firm. I can't stress enough how awesome and professional the people are here. Silvia & Erica made me feel so comfortable and welcome. I never had to guess anything. Anytime I call, emailed, or even texted. They were always there. If not they would get back to me as soon as possible. My case was not an easy situation for me but I tell you these guys made it seem like it was. I'm so glad that I use Phillip & Phillip. I thank you guys from the bottom of my heart. I am so grateful to have met such awesome, honest, and caring people. Thank you again. Djuana
I highly recommend Parisis (Gerry) Fillippatos with Phillips & Associates to represent you for employment related matters. He and his team were professional, attentive to every detail and brilliant at identifying the legal grounds to win the case. Parisis's communication and delivery were highly articulate and precise. He is personable and makes you feel comfortable in the maze of legal jargon. Finally, his confidence, perseverance and masterful negotiation skills deliver the win. Anonymous
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