As part of the gigantic financial reform bill passed last year, the Securities and Exchange Commission introduced a new program last month that can reward whistleblowers with bounties that range from $50,000 to millions. The SEC, which regulates financial investments, is looking for tips on fraud and misconduct they can use to hit big companies with penalties of $1 million or more.
If everything works out, the tipster gets a cut – 10 to 30 percent, depending on how helpful you are, how you got the info, and whether you were involved in any of the illegal activity yourself.
The idea is to prevent another massive scheme or meltdown, but there’s already been major disagreement over the program. Heavyweights like AT&T, Verizon, and the U.S. Chamber of Commerce opposed the new program, according to USA Today. The SEC barely approved the program through a 3-2 vote in May. (The two Republican commissioners voted no.)
If you’re ready to report some wrongdoing and rake in the rewards, here are the basics of the whistleblower rules:
- You only get paid if the SEC does. Your info has to be part of an investigation that leads to a “successful SEC action resulting in an order of monetary sanctions exceeding $1 million.” You don’t have to make the case, but the SEC needs enough from you to build it. You can find recent successful actions in the list here.
- Only original, volunteered info is eligible. You can’t get paid for info someone else has already provided to the SEC or facts that are publicly available. You also don’t get credit for handing over info that’s been requested by the SEC or any other government regulatory agency.
- Some people can’t be whistleblowers. The rules generally exclude compliance and audit employees, attorneys who got the info from clients, people who obtain info illegally, and foreign officials. However, you can submit info on a company without being its employee. (It just might be hard to get.) There are some exceptions spelled out in the full rules.
- You can tell your bosses you’re going to snitch. If you report a problem to your company and also report it to the SEC within four months, or if the company investigates and reports the problem on your behalf, you’re still eligible for a reward after a successful SEC action. The law also says the company can’t mess with you: “Employers may not discharge, demote, suspend, harass, or in any way discriminate against you because of any lawful act done by you in providing information to us under the whistleblower program or assisting us in any investigation or proceeding based on the information submitted.” You can take your employer to court, and if you win, may get your job back and double back pay, on top of all the legal fees. The SEC may also take separate legal action against the employer.
- You can stay anonymous and collect. If those protections don’t sound good enough, you’ll need an attorney to help you file anonymously. The SEC adds, “Whether or not you seek anonymity, the SEC is committed to protecting your identity to the fullest extent possible. For example, we will not disclose your identity in response to requests under the Freedom of Information Act.” They caution your name may be revealed through court documents, though.
And if you work for a company that’s doing something wrong, we’re always on the lookout for something newsworthy!