The SEC Whistleblower Program was put in place by Congress and provides incentives to people who have information on violations or potential violations of the Federal Securities Act. The Whistleblower program was created within the Dodd-Frank Act and Paul E. Kanjorski a retired congressman who was involved in the creation of the act points out that it has been very useful in preventing fraudulent dealings and also arresting those involved in malpractices.
It did this by increasing foot soldiers in the fight against these violations. If an employee notes discrepancies in the books they can report these under the Whistleblower program so that they can be investigated. The whistleblower will then be awarded a sum of money as long as the information they provided led to an actionable outcome. The program also protects whistleblowers from the companies and/or individuals they report on.
He sees the SEC Whistleblower program as capable of making people more willing to report illegal activities perpetrated by corporations or individuals within corporations. Today a lot of corporations ask employees to sign agreements and have protocols that stop them from making company wrongdoing public. They cannot share the non-ethical and potentially illegal activities the company is involved in because they are under the impression that to do so is to open themselves to charges or a lawsuit.
The agreements use sweeping legalese to ensure employees do not make complaints about sexual harassment, violation of securities legislation, violation of environmental among others. Since most people do not ask for legal counsel when signing employment contracts they are not made aware that such agreements are not enforceable. Every person has a right to report violations of the law that they notice and no one can ask them not to do it legally.
When making a report of wrongdoing it is important for the whistleblower to remember that the information presented must be legally obtained or better still to employ the services of a SEC Whistleblower attorney. If for instance, an accountant notices discrepancies in the books they can report this but if they break into a managers office to steal the information, it is not actionable as it was obtained illegally. When recording a telephone conversation one should be aware of the laws governing information collected in this way in the state they are in. This is because in states like Connecticut for a recording to be admissible both parties must give consent.
About SEC Whistleblower program
The SEC Whistleblower program was put in place by Congress in the Dodd-Frank Act. It gives monetary incentives to whistleblowers.