The Securities Exchange Commission has a very special and important duty in the financial world. In the simplest of descriptions, the SEC’s oversight works to make sure people in the financial industry remain honest. Illegal acts such as insider trading are investigated by SEC officials. Those who violate the myriad of SEC laws end up facing stiff fines, jail sentences, or both.
Wall Street and the financial industry, however, are both going to have a segment that seeks to avoid laws or work in the gray area of marginal legality. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act established new rules and regulations to keep the industry honest. Not everyone is honest though. And the SEC’s investigators cannot be everywhere. This is why whistleblowers are so important to financial reform.
Whistleblowers are people who come forward to discuss and reveal illegal activities they learn about. Often, they are employees who have first-hand knowledge of the illegalities occurring in their presence. Unfortunately, many people are intimidated about coming forward and reporting any illegal activities.
The Whistleblower Program at the SEC has been expanded and has new rules in place designed to help those who choose to blow the whistle on corruption. The Dodd-Frank law put into place a number of protections against retaliation. So, there are options that exist for persons worried about the aftermath of coming forward.
Financial incentives exist as well. A reward program is in place for whistleblowers. The money available to those who cast light on illegal activities could turn out to be quite lucrative. The rewards made available to whistleblowers could be well into the six or even seven figure range. The rewards pay 10% to 30% of SEC sanctions that exceed $1 million. As such, if a company is hit with a $3 million fine, 10% would pay $300,000.
Still, there are grave concerns on the part of many potential whistleblowers regarding their safety and financial well-being. Such citizens should realize they are not locked into doing anything on their own. Hiring a SEC whistleblower lawyer who specializes in representing clients with concerns over retaliation is an advisable step. Working with this type of attorney makes the entire process of reporting on wrongdoing easier and less stressful. Additionally, procuring representation aids in maintaining personal safety in addition to peace of mind.