Legal Developments in Securities Law

SEC Dodd-Frank Whistleblower Claim Update

The SEC recently released its Fiscal Year 2011 Annual Report on the Dodd-Frank Whistleblower Program, found here. The report noted that 334 whistleblower tips were received in only the first seven weeks of the program. The most common tips were concerning market manipulation, corporate disclosures and financial statements, and offering fraud.

Tips were received from 37 states, China, the United Kingdom, and a number of other foreign nations. In the United States, whistleblowers from California and New York submitted the most tips.

It is not surprising that no awards have been allocated to whistleblowers yet, but whistleblowers who submitted claims should pay attention to the SEC’s procedure for claiming an award to which they may be entitled. If an action results in an entry of final judgment that exceeds $1 million, the whistleblower may be entitled to an award (see our previous blog post). After the final judgment on an action is entered, the Office of the Whistleblower will publish a Notice of Action on the SEC’s website. At this time,  the whistleblower will have 90 days to apply for his or her award by completing the Form WB-APP. The SEC noted in its report that they may eventually provide individual notices to whistleblowers who may have contributed to the successful final judgment, but for the time being, whistleblowers should pay careful attention to the Notices of Action posted on the SEC’s website.


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