SEC Rulings Remind Whistleblowers of the Importance of Procedure

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You will never understand bureaucracies until you understand that for the bureaucrats procedure is everything and outcomes are nothing. — Thomas Sowell

Proper procedures are of the utmost importance for whistleblowers seeking to gain legal protections and financial rewards for their disclosures. The mere fact that you provided information that saved the government millions of dollars or put a stop to some egregious wrong may not help you if you did not follow the procedures set forth by law. While there are all too many examples of this, a recent pair of rulings by the Securities and Exchange Commission (SEC) is especially poignant.

The SEC whistleblower programs that took shape under the Dodd-Frank Act are very particular as to whom whistleblowers should report, when they should report and how they should report. The agency has not hesitated to refuse compensation to whistleblowers who did not follow the correct procedures, even when their information led to huge breakthroughs:

  • In one case the SEC refused to reward a claimant whose information led to the assessment of more than $20 million in penalties because she had waited more than 90 days to file the claim.
  • In another case, the SEC denied compensation because the whistleblower submitted her information to the Department of Housing and Urban Development and the Federal Bureau of Investigation rather than directly to the SEC.

Whether navigating an administrative process like the SEC whistleblower program or the court system in a qui tam action or other similar lawsuit, whistleblowers in Dallas and throughout the country need to be aware of the myriad of procedural requirements to which they are subject. With guidance from an experienced attorney, you can avoid the types of missteps that may cost you immensely down the road.

Topics:  Compliance, SEC, Whistleblower Protection Policies, Whistleblowers

Published In: Civil Remedies Updates, Labor & Employment Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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