Frequently Asked Questions
The answers to these frequently asked questions represent the views of the staff of the Office of the Whistleblower. They are not rules, regulations or statements of the Securities and Exchange Commission. Further, the Commission has neither approved nor disapproved them. These FAQs provide short general summaries of certain key features of the SEC Whistleblower Program and do not purport to be a complete or comprehensive discussion of all of its provisions. For detailed information about the program, including eligibility requirements and certain limitations that apply, please see Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Amended Rules implementing the program.
On June 28, 2018, the SEC voted to propose several amendments to the rules governing the whistleblower program. The proposed amendments were published in the Federal Register on July 20, 2018 and were open for public comment thru September 18, 2018.
On September 23, 2020, the SEC voted to adopt amendments to the rules governing its whistleblower program that are designed to provide greater clarity to whistleblowers and increase the program’s efficiency and transparency. These rule amendments are now effective as of December 7, 2020. Please review the guidance to determine the impact the amendments have on the rules that may apply to your situation.
1. What is the SEC Whistleblower Program?
The Whistleblower Program was created by Congress to provide monetary incentives for individuals to come forward and report possible violations of the federal securities laws to the SEC. Under the program eligible whistleblowers (defined below) are entitled to an award of between 10% and 30% of the monetary sanctions collected in actions brought by the SEC and related actions brought by certain other regulatory and law enforcement authorities.
The Program also prohibits retaliation by employers against employees who provide us with information about possible securities violations.
2. Who is an eligible whistleblower?
3. What information can I submit to the SEC?
The SEC conducts investigations into possible violations of the federal securities laws. In general, the more specific, credible, and timely a whistleblower tip, the more likely it is that the tip will be forwarded to investigative staff for further follow-up or investigation. For instance, if the tip identifies individuals involved in the scheme, provides examples of particular fraudulent transactions, or points to non-public materials evidencing the fraud, the tip is more likely to be assigned to Enforcement staff for investigation.
The SEC does not have jurisdiction to take action on information that is outside the scope or coverage of the federal securities laws. We may, in appropriate circumstances, refer your matter to another regulatory or law enforcement agency.
If you would like to provide the SEC with information about fraud or wrongdoing involving potential violations of the federal securities laws please follow the instructions provided in Rule 21F-9 and FAQ 9. Some examples of the kind of conduct the SEC is interested in include:
- Ponzi scheme, Pyramid scheme, or a High-Yield Investment Program
- Theft or misappropriation of funds or securities
- Manipulation of a security's price or volume
- Insider trading
- Fraudulent or unregistered securities offering
- False or misleading statements about a company (including false or misleading SEC reports or financial statements)
- Abusive naked short selling
- Bribery of, or improper payments to, foreign officials
- Fraudulent conduct associated with municipal securities transactions or public pension plans
- Initial Coin Offerings and Cryptocurrencies
- Other fraudulent conduct involving securities
4. What does it mean to “voluntarily” provide information?
5. What is “original information?”
In September 2020, the SEC adopted interpretive guidance on the meaning of “independent analysis.” See Rule Amendment FAQ 5.
6. How might my information “lead to” a successful SEC action?
Your information satisfies the “led to” criterion if your information causes us to open a new investigation, re-open a previously closed investigation or pursue a new line of inquiry in connection with an ongoing investigation, and we bring a successful enforcement action based at least in part on the information you provided. Additionally, you may still be eligible if your information relates to an ongoing examination or investigation, if the information you provide significantly contributes to the success of our resulting enforcement action. You may also be eligible if you report your information internally first to your company, and the company later reports your information to us, or reports the results of an internal investigation that was prompted by your information, as long as you also report directly to us within 120 days. See Rule 21F-4(c).
7. I work at a company with an internal compliance process. Can I report internally and still be eligible for a whistleblower award?
8. I provided information to the SEC before the enactment of Dodd-Frank on July 21, 2010. Am I eligible for an award?
9. How do I submit information under the SEC whistleblower program?
OWB encourages all individuals to submit their whistleblower tips and any additional information electronically through the Commission’s on-line portal. In January 2018, the Commission released an updated, more user-friendly version of the TCR System. There are several benefits of using the on-line portal, including the fact that individuals receive an immediate acknowledgement of their submission along with a confirmation number. The tip is automatically populated in a queue for staff who triage tips and complaints. Those individuals who do not have ready access to a computer may submit hard-copy Form TCRs. For those who submit a hard-copy Form TCR by mail or fax, you should maintain a copy of all documents and materials that you submit in connection with your whistleblower tip, including a mail receipt or fax confirmation.
After submitting an initial tip, a whistleblower is free to submit additional information or materials. Additional information may be submitted through the on-line portal, with reference to the original TCR submission number, or may be submitted directly to the investigative staff if the whistleblower is working with Enforcement staff on the matter. Those individuals who do not have ready access to a computer should submit additional information through mail or fax. To the extent additional information is sent to OWB in hard-copy by mail or fax, OWB uploads the additional information into the TCR System. Due to the increasing volume of additional information submitted in paper form to OWB, and the ready availability of electronic submissions, OWB no longer sends acknowledgement letters in response to whistleblower tips and additional information. To the extent individuals want written confirmation of receipt of their whistleblower tip or additional information, they should make their submission through the on-line portal, noting the original TCR number if possible, and they will automatically receive confirmation of their submission online.
Please send your submission using only one method of transmission. Submitting information in multiple ways (e.g., via fax and mail) causes confusion and delay in the processing of the information.
10. Can I submit my information anonymously?
11. Will the SEC keep my identity confidential?
12. What happens to my tip once it is received by the SEC?
All tips, complaints and referrals received by the SEC are fully reviewed by our Enforcement staff. During the evaluation process, the Office of Market Intelligence (“OMI”) staff examines each tip to identify those with high-quality information that warrant the additional allocation of SEC resources. When OMI determines a complaint warrants deeper investigation, OMI staff assigns the complaint to one of the SEC’s eleven regional offices, a specialty unit, or to an Enforcement group in the Home Office. Complaints that relate to an existing investigation are forwarded to the staff working on the matter. Tips that could benefit from the specific expertise of another Division or Office within the SEC generally are forwarded to staff in that Division or Office for further analysis.
The SEC may use information from whistleblower tips and complaints in several different ways. For example, the SEC may initiate an enforcement investigation based on the whistleblower’s tip. A whistleblower tip may also prompt the SEC to commence an examination of a regulated entity or a review of securities filings, which may lead to an enforcement action. Even if the tip does not cause an investigation to be opened, it may still help lead to a successful enforcement action if the whistleblower provides additional information that significantly contributes to an ongoing or active investigation.
The SEC conducts its investigations on a confidential basis as a matter of policy. The purpose of this policy is to protect the integrity of any investigation from premature disclosure and to protect the privacy of persons involved in our investigations. The SEC generally does not comment on whether it has opened an investigation in a particular matter or the status of its investigations. While this can be frustrating, it is necessary to protect the integrity of the investigative process.
13. How will I learn about the opportunity to apply for an award?
14. How do I apply for an award?
15. How can I apply for an award in connection with a related action?
Individuals who provide information that leads to successful SEC actions resulting in monetary sanctions over $1 million may also be eligible to receive an award if the same information led to a related action brought by certain other authorities, such as a parallel criminal prosecution. You must complete and return Form WB-APP to the Office of the Whistleblower via mail to 100 F Street, NE, Mail Stop 5631, Washington DC 20549, or by fax (703) 813-9322. OWB acknowledges receipt of Form WB-APPs by letter.
If a final order imposing monetary sanctions has been entered in a related action at the time you submit your claim for an award in connection with SEC’s action, you must submit your claim for an award in that related action on the same Form WB-APP that you use for the SEC action. If a final order imposing monetary sanctions in a related action has not been entered at the time you submit your claim for an award in connection with a SEC action, you must submit your claim on Form WB-APP within 90 calendar days of the issuance of a final order imposing sanctions in the related action. See Rule 21F-11.
Please note that under the new whistleblower rule amendments, Deferred Prosecution Agreements and Non-Prosecution Agreements entered into by the U.S. Department of Justice may be considered a related action for award purposes. See Rule Amendment FAQs 16-18. Please also note that under the new whistleblower rule amendments, if another authority has a whistleblower award program, then the SEC will not consider the authority’s action to be a “related action” unless the SEC finds that the SEC’s own whistleblower program has a more direct and relevant connection to the action.
16. What factors does the SEC consider in determining the amount of the award?
Under new Rule 21F-6(c), there is a 30% presumption if the award amount is $5 million or less and there are no negative factors (e.g., culpability, unreasonable reporting delay, and interference with an internal compliance system). This presumption may be overcome if the whistleblower provided limited assistance or if a maximum award would be contrary to investor protection. For more information on the 30% presumption, see Rule Amendment FAQ 2.
If the award amount is over $5 million, the Commission will consider the following factors in determining the amount of an award based on the facts and circumstances of each case.
We may increase the award percentage based on the existence of these factors:
- The significance of the information you provided us to the success of any proceeding brought against wrongdoers.
- The extent of the assistance you provide us in our investigation and any successful proceeding.
- Our law enforcement interest in deterring violations of the securities laws by making awards to whistleblowers who provide information that leads to the successful enforcement of these laws.
- Whether, and the extent to which, you participated in your company's internal compliance systems, such as, for example, reporting the possible securities violations through internal whistleblower, legal or compliance procedures before, or at the same time, you reported them to us.
We may reduce the amount of an award based on these factors:
17. Can I appeal the SEC's award decision?
You have two opportunities to appeal the award determination. First, OWB will notify you of the preliminary determination of the SEC’s claims review staff to recommend that the SEC either grant or deny your award application, and if granted, the percentage amount of your award. You may request reconsideration of this preliminary determination by submitting your response to OWB within 60 days of the later of (i) the issuance of the preliminary determination or (ii) your receipt of the record that was relied upon in making the preliminary determination, if you requested the record within 30 days of the issuance of the preliminary determination. See Rule 21F-10. Please note there are shorter time periods if your claim was subject to the Preliminary Summary Disposition Process established by new Rule 21F-18. See Rule Amendment FAQ 14.
The claims review staff will consider your response and forward its proposed final determination to the Commission. If the Commission denies your application for an award, you may file an appeal in an appropriate United States Court of Appeals within 30 days of the Commission’s final decision being issued. See Rule 21F-13. However, if you are granted an award and the Commission follows the factors described above and the total amount awarded is between 10% and 30% of the monetary sanctions collected in the action, then the Commission’s decision is not appealable.
18. What rights do I have if my employer retaliates against me for submitting information to the SEC?
Employers may not discharge, demote, suspend, harass, or in any way discriminate against you because of any lawful act done by you in, among other things, (i) providing information to us under the whistleblower program, or (ii) assisting us in any investigation or proceeding based on the information submitted. If you believe that your employer has wrongfully retaliated against you, you may report your concerns to the SEC and we may, in appropriate circumstances, bring an enforcement action against a company.
You can find more information about the Dodd-Frank whistleblower protections, including the time period by which a whistleblower must file a private action in federal court, in Section 922 of the Dodd-Frank Act.
Also, under the Sarbanes-Oxley Act, you may be entitled to file a complaint with the U.S. Department of Labor if you are retaliated against for reporting possible securities law violations. For more details on filing whistleblower complaints under the Sarbanes-Oxley Act, please visit the Department of Labor's whistleblower website.
For more information about retaliation, please see the retaliation section of the website.
19. If I have more questions, who can I call?
To help promote the agency’s whistleblower program and establish a line of communication with the public, OWB operates a whistleblower hotline where whistleblowers, or would-be whistleblowers, their attorneys, or other members of the public with questions about the program may call. Individuals leave messages on the hotline, which are returned by OWB attorneys within 24 business hours. To protect the identity of whistleblowers, OWB will not leave return messages unless the caller’s name is clearly and fully identified on the caller’s voicemail message, or unless the caller gives their permission for us to leave a message. If OWB is unable to leave a message because the individual’s name is not identified or if it appears to be a shared voicemail system, OWB attorneys make two additional attempts to contact the individual.
If you would like to speak to an attorney in the Office please call 202-551-4790 and provide your TCR submission number (if you have one) when you leave a message.
Modified: Dec. 10, 2020