The U.S. Securities and Exchange Commission is an agency of the United States federal government that holds the responsibility for enforcing federal securities laws. These laws include the Securities and Exchange Act of 1934, The Securities Act of 1933, the Trust indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statutes. It is commonly referred to as the Exchange Act today. In addition to the laws that have been on the books for many years, the SEC has had a bounty program in place for over 20 years reward whistleblowers monetarily for insider trading complaints and violations. Yet, despite even this monetary reward campaign the Commission found few applications from individuals with information about trading violations. It was assumed that this was because either the program was not recognized or possibly the program was not well designed.
Because of the lack of use of the whistleblower program, the Exchange initiated an Office of the whistleblower whose current chief is Sean McKessy. The office has 8 staff attorneys, paralegals, and a support specialist. The office was put together as a partial response to the almost complete financial collapse of the banking system in America in 2008 when it was discovered that many of the financial institutions and banks in America were blatantly breaking the law to make money while they literally stole money by the truckload from the public. The whistleblower program has completely altered this as SEC chair Mary Jo White has called the whistleblower program a game changer. To enhance this in the minds of security employees and to give them peace of mind in coming forward to report violations, Jordan Thomas and Labaton Sucharow former SEC insiders have wrote and developed the SEC Insider’s Guide to provide straight forward information, and key information to help SEC whistleblowers navigate the ins and outs of how the process works and the agencies involved and of course how to collect their money. Labaton Sucharow also started the very first whistleblower advocate law firm in the country.
Under the rules of the program, it is important to note that the Security and Exchange Commission is required to pay 10-30% of financial sanctions collected as a result of a successfully completed enforcement action. This reward is available only if the sanctions exceed $1,000,000.00. However, if the threshold is met the whistleblower may also be eligible for additional money awards based on sanctions collected by other regulatory agencies. The law also prohibits retaliation by employers against any whistleblower. They may even report violations anonymously if represented by a SEC whistleblower attorney.