More Information About the SEC Whistleblower Program

In July, 2010, Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 21F, the “Securities Whistleblower Incentives and Protection,” to the Securities Exchange Act of 1934. This section includes provisions for a new SEC Whistleblower Program that entitles whistleblowers who report potential securities law violations to compensation in certain cases, and protects whistleblowers against retaliation by employers. The new provisions will apply to information provided after July 22, 2010.

On November 3, 2010, the Securities and Exchange Commission (SEC) proposed rules for implementing the Whistleblower Provisions to reward whistleblowers who provide original information about potential federal securities laws violations that leads to successful enforcement and monetary sanctions of over $1 million. 

Under the SEC Whistleblower Program’s proposed rules, whistleblowers could receive a minimum of 10% and maximum of 30% of the SEC’s monetary recovery in a successful enforcement action that results in sanctions of over $1 million if the tip consists of high-quality, original information based on the whistleblower’s independent knowledge or analysis, and meets certain additional conditions.

In order to qualify for an award under the Whistleblower Program, then:

  • A whistleblower must provide information voluntarily, meaning “before receiving any formal or informal request, inquiry, or demand from the Commission, Congress, any other federal, state or local authority, any self-regulatory organization, or the Public Company Accounting Oversight Board about a matter to which the information in the whistleblower’s submission is relevant” (see


  • A whistleblower must provide information that is original. This means that the information must be “derived from the whistleblower’s independent knowledge or analysis” it is not “already known to the Commission from any other source” (see


  • A whistleblower’s tip must lead to successful enforcement. This has occurred if “the information results in a new examination or investigation being opened and significantly contributes to the success of a resulting enforcement action” or if “the conduct was already under investigation when the information was submitted, but the information is essential to the success of the action and would not have otherwise been obtained” (

In addition to a potential monetary reward for whistleblower tips, the Dodd-Frank Whistleblower Provisions block employers from retaliating against whistleblowers.

As of September 30, 2010, the SEC had a fund of $451 million set aside for rewards under the Whistleblower Program (see