The SEC Whistleblower Program pays awards of 10% to 30% of the monetary sanctions collected when a person voluntarily gives the SEC original information that leads to a successful enforcement action with sanctions over $1 million. Separately, the Dodd-Frank Act protects people who report possible securities violations to the SEC from retaliation by their employer. Both work alongside New Jersey's CEPA and the Sarbanes-Oxley Act, and the choices you make early affect all of them.
Who can receive an SEC whistleblower award?
The program, created under Section 21F of the Securities Exchange Act, is open to individuals who provide:
- Original information — derived from your own independent knowledge or analysis, not already known to the SEC, and not exclusively from public sources
- Voluntarily — before the SEC or another authority requests it from you
- That leads to a successful enforcement action with monetary sanctions over $1 million
Awards can also extend to related actions brought by other agencies based on the same information. Some people face extra conditions or are generally ineligible — for example, people who learned the information through a legal, audit or compliance role, unless an exception applies, and people convicted of a criminal violation related to the action.
Similar award programs exist for commodities violations through the CFTC, and for certain money-laundering and sanctions violations through the Treasury Department. Fraud on government programs is a different category, covered by the False Claims Acts — see CEPA and False Claims Act claims.
How do you report to the SEC?
Tips are submitted to the SEC on Form TCR, online or by mail. You can submit:
- In your own name, or
- Anonymously through a lawyer, who submits the tip for you. Anonymous whistleblowers must be represented by counsel to be eligible for an award.
The order matters. Reporting internally first, then to the SEC, can affect award amounts and eligibility windows, and the content of a tip shapes how the SEC uses it. Plan the report before you make it.
What does Dodd-Frank protect against?
Dodd-Frank's anti-retaliation provision, 15 U.S.C. 78u-6(h), prohibits an employer from discharging, demoting, suspending, threatening, harassing or discriminating against a whistleblower for providing information to the SEC or assisting in an SEC investigation.
In Digital Realty Trust v. Somers (2018), the Supreme Court held that this protection applies only to people who reported to the SEC before the retaliation. An employee who reported only inside the company is not protected by Dodd-Frank — but may be by Sarbanes-Oxley or New Jersey's CEPA.
What can I recover for Dodd-Frank retaliation?
A Dodd-Frank retaliation claim is brought directly in federal court, without first going to an agency. Remedies include:
- Reinstatement
- Two times back pay, with interest
- Litigation costs, expert witness fees and reasonable attorney fees
The limitations period is generally six years from the violation, or three years from when the employee knew or should have known the material facts, and no more than ten years in any event.
How does this fit with a New Jersey CEPA claim?
New Jersey's CEPA protects internal reports and objections as well as reports to public bodies, covers private and public employers of every size, and allows a jury to award compensatory and, in appropriate cases, punitive damages. Filing a CEPA action waives certain other state-law claims (N.J.S.A. 34:19-8), so the federal and state claims should be planned together. See the overview of corporate and financial fraud whistleblowers and what counts as protected activity.
Who handles these matters at Gray Law Group?
The firm's whistleblower practice is led by partner Bruce D. Nimensky, a New Jersey trial attorney whose practice focuses on CEPA retaliation and complex employment litigation.
Talking to a lawyer about your situation
If you know of possible securities fraud and are deciding whether and how to report it — or you already reported and your employer's treatment of you changed — a confidential conversation can help you weigh the award program, retaliation protection and your deadlines before you act.
Gray Law Group's office is in Jefferson, in Morris County, and the firm represents employees throughout New Jersey. Call 973-240-7313 or request a consultation.
Frequently asked questions
Can I report to the SEC anonymously?
Yes, but to report anonymously and remain eligible for an award, you must be represented by a lawyer, who submits the tip on your behalf. Your identity must be disclosed to the SEC before an award is paid, and the SEC is generally required to keep it confidential.
Can my employer stop me from reporting to the SEC?
SEC Rule 21F-17 prohibits anyone from taking action to impede an individual from communicating directly with the SEC about a possible securities violation, including by enforcing or threatening to enforce a confidentiality agreement. The SEC has brought enforcement actions over agreements that did this.
Is a report to my company's compliance department enough for Dodd-Frank protection?
Not for Dodd-Frank's anti-retaliation provision, which the Supreme Court in Digital Realty Trust v. Somers (2018) limited to people who reported to the SEC. An internal report can still be protected under Sarbanes-Oxley or New Jersey's CEPA.
Do I need to work at a public company to use the SEC program?
No. The award program is about information on securities law violations, which can involve private funds, advisers, brokers and other market participants as well as public companies. Whether you are protected from retaliation depends on the facts and on which law applies.
Who handles these matters
This website is for informational purposes only and does not constitute legal advice. Prior results do not guarantee a similar outcome.