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Whistleblower activity and SEC awards

On Behalf of | Apr 19, 2021 | Whistleblower Claims

A whistleblower is someone who makes a report about unethical activity, fraud, abuse, waste or similar actions to an agency that can respond appropriately. While often an employee, a whistleblower may be someone who has knowledge in some other capacity, such as a contractor or an investor. Employees in Hawaii who become whistleblowers are protected by both state and federal law.

Safe harbor

The Securities and Exchange Commission may pay an award to a whistleblower. Since 2012, when the first award was paid, the agency has paid about $760 million in awards to 145 individuals. SEC rules include what is known as a “safe harbor” provision that gives the whistleblower 120 days to report the violation to the agency after reporting it to another body.

Meeting reporting deadlines

One whistleblower made an internal report to a company about wrongdoing. The company reported it to another body, and that body made a report to the SEC. Although this report was made through other channels, the original whistleblower also reported to the SEC within 120 days. As a result, the individual received over $500,000. This represented the 40th award in that fiscal year and the highest number of awards in any fiscal year.

Funding for whistleblowers

Congress established an investor protection fund that violators must pay into. When sanctions are greater than $1 million, a whistleblower might receive between 10% and 30% of the money.

Employees who believe that their employer or another company or organization may be in breach of ethics or laws might be concerned about what type of protection is available to them. They may want to consult an attorney to find out what their rights are as a whistleblower and what steps they should take.