SEC Adopts New Rules And Procedural Changes
Against A Backdrop Of Increasing Whistleblower Rewards
Fiscal Year 2021 On Record-Breaking Pace For Whistleblower Rewards
On November 5, the U.S. Securities and Exchange Commission (SEC) announced several rule changes for whistleblower cases under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), Pub. L. 111-203; the Securities Exchange Act of 1934 (“Exchange Act”) Rule 21F4(d), 17 C.F.R. § 240.21F-4(d)(2); the Securities Act of 1933, 15 U.S.C. §§ 77a et seq, Rule 10b-5; and any other federal securities law. SEC whistleblower cases begin by submitting a TCR (“Tip, Complaint or Referral”) Form to the SEC describing the securities fraud you have knowledge of. The San Francisco and California SEC whistleblower attorneys at Evans Law Firm, Inc. can assist you in preparing your TCR and represent you before the SEC with the goal of obtaining a reward if the SEC recovers from the defendant as a result of your information. Call us today at (415)441-8669 or toll free at (888)50-EVANS(503-8267) if you have credible information of securities fraud and we can help.
New Procedural Rules and Deadlines
The SEC’s new rules have the following important impact on individual whistleblower cases:
- The SEC now has broader discretion in making awards in smaller cases where sanctions obtained by the SEC are $5 million or less that rewards should be paid at the highest amount (i.e., 30% of sanctions obtained), barring the existence of negative factors that would justify a reduction. This rule applies to ‘all award claims still pending’ on December 7, 2020. Thus, the applicability of this rule is retroactive.
- Rule 21F-9 requires whistleblowers to file complaints using the TCR form to qualify for a reward. Whistleblowers have 30-days from an initial contact with the SEC to file the TCR. The 30-day requirement is tolled until a whistleblower obtains actual or constructive knowledge of the TCR filing requirement. However, the thirty-day requirement can now be triggered when a whistleblower hires an attorney to file a reward claim. This provision applies ‘to all award claims still pending’ as of December 7, 2020, and all future filings. All persons contacting the SEC with information on potential violations need to be aware of this 30-day filing deadline, along with all attorneys who represent whistleblowers in SEC proceedings.
- Rule 21F-13 relates to the administrative record on appeal of Whistleblower Award Applications. Under this rule, any WB-APP award application filed with the SEC after December 7, 2020, may not be supplemented. Therefore, whistleblowers must be careful to include the entire basis for an award claim in their WB-APP application. This rule applies ‘only to covered-action and related-action award applications that are connected to a Notice of Covered Action’ posted on or after December 7, 2020. The WB-APP is submitted after the SEC issues a Notice of Covered Action (i.e., notice that the agency has recovered sanctions from the defendant).
Rewards Breaking Previous SEC Records
As the SEC changes its Rules tightening some procedural requirements, awards on the other hand are on a record-breaking course this year. Since the 2021 fiscal year began on October 1, the SEC has issued approximately $154 million to six whistleblowers. In the 2020 fiscal year, the SEC issued whistleblower awards totaling approximately $175 million, the most in program history. The SEC is currently on pace to break that record within the first two months of this fiscal year. In order to secure a reward for any original information of fraud reported to the SEC, the whistleblower must follow all procedural requirements and satisfy all filing deadlines. That is where experienced whistleblower attorneys like the attorneys at Evans Law Firm can help. Out attorneys know the procedural requirements, deadlines, and the strongest way to present your information to the SEC with an eye to an ultimate reward if the SEC prevails against the corporation or individuals committing the fraud.
Call Ingrid M. Evans and the other whistleblower attorneys at Evans Law Firm today if you have credible information of securities fraud that might be the basis of a whistleblower tip. The law protects you from any retaliation by your employer and our attorneys can represent you in any wrongful retaliation case as well. We also handle cases under the federal or California False Claims Acts, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), the Bank Secrecy Act, the Internal Revenue Service Whistleblower Office, the Commodity Futures Trading Commission Whistleblower Office, the FINRA Whistleblower Office or other government agency whistleblower programs. If you have information that may lead to a whistleblower suit of any kind, call us at (415) 441-8669 toll free at (888)50-EVANS(503-8267), or email <a href=”mailto:email@example.com”>firstname.lastname@example.org</a>.