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New York SEC Whistleblower Reward

New York SEC Whistleblower Reward

Individuals who become aware of fraud or wrongdoing at a public company, or at a securities or financial firm, often don’t know that they might be eligible for a New York SEC whistleblower reward.

What Is A New York SEC Whistleblower Reward?

As a preliminary matter, an SEC whistleblower award is not limited to New York.  Referring to a New York SEC whistleblower reward is usually just a way of clarifying that the SEC gave out an SEC whistleblower reward in connection with one of four things:

  1. to one or more SEC whistleblowers who live or work in New York;
  2. a securities fraud or violation committed by a company located in New York, or a person living or working in New York;
  3. a fraud or violation that occurred in New York, regardless of where the SEC whistleblower or perpetrator(s) are from; or
  4. an SEC lawsuit filed in a federal court in New York.

This is because an SEC whistleblower reward is not granted by the State of New York or New York City. New York SEC whistleblower rewards, as with all other SEC whistleblower awards, are authorized by federal statue.  They are given out by the U.S. Securities and Exchange Commission (“SEC”).

The SEC is a Federal Agency, has jurisdiction throughout the country, and is not governed or controlled by any State or local government.  Therefore, no matter where an individual resides or works, they can qualify to receive an SEC whistleblower award if they satisfy all of the rules and requirements of the SEC whistleblower program.

How It Works

Basically, if the SEC successfully obtains a result of over $1 million from an investigation or case that was brought due to an SEC whistleblower’s tip, U.S. federal law mandates that the SEC grant an award to the qualified whistleblower(s) of between 10% - 30% of the money that it collects from the perpetrators.

The SEC has the jurisdiction to convey an SEC whistleblower award to anyone who meets the requirements, either in the United States or internationally.  Per the rules that govern the SEC whistleblower program, SEC whistleblowers do not even have to be employees of the U.S. public companies or financial institutions they report on.  Further, SEC whistleblowers do not have to be U.S. citizens or live in the United States.  Anyone who provides evidence to the SEC about a corporate or securities fraud at any U.S. public company, or investment or financial institution, is potentially eligible to receive an SEC whistleblower award.

Eligibility For A New York SEC Whistleblower Reward

There are three core conditions that must be satisfied to qualify for an SEC whistleblower reward:

  1. The SEC whistleblower must voluntarily report original information to the SEC, which results in the SEC opening an investigation or instigating an action, or that substantially augments an existing investigation.
  2. The SEC must obtain a successful result from its investigation, such as: agreeing to a settlement with the perpetrators; winning a lawsuit in a Federal Court; or obtaining an SEC administrative order against the wrongdoer(s).
  3. The SEC’s “successful result” must include monetary sanctions against the wrongdoer(s) of at least $1 million in the aggregate, before an award can be made available to potential SEC whistleblowers.

In addition to the three aforementioned rules, there are lots of other rules and procedures that need to be followed to satisfy the SEC whistleblower requirements and/or position whistleblowers to make a strong award application.  Since the failure to satisfy those requirements can result in disqualification from receiving an SEC whistleblower reward, or a reduced award, it may be a good idea for potential SEC whistleblowers to consult with an experienced and reputable SEC whistleblower law firm before submitting their tip to the SEC.

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Jason Pickholz -

The Pickholz Law Offices represents U.S. and international clients in securities and white collar cases. The Firm has helped whistleblowers report frauds to the SEC, CFTC, and IRS, and has defended clients in investigations by the SEC, CFTC, DOJ, FINRA, and other financial and securities enforcement regulators.

The Firm’s founder, Jason Pickholz, is the author of the two-volume book Securities Crimes, has appeared on tv and radio, and has taught continuing legal education courses. A former BigLaw partner, he has been representing clients in financial and securities fraud cases since 1995. In recognition of his many achievements, Mr. Pickholz was elected by his legal peers to be a Fellow of The New York Bar Foundation, an honor limited to just 1% of all attorneys in the New York State Bar Association.

Mr. Pickholz has been counsel in many high-profile cases. He was the first attorney ever to win an SEC whistleblower award on appeal to the Commission, which Inside Counsel magazine called one of the five key events in the history of the SEC whistleblower program. On the defense side, Mr. Pickholz has defended clients in the SEC’s COVID-19 investigations, the CFTC’s cryptocurrency cases, and a former US Senator, among others.

If you want to speak with a CFTC, IRS, or SEC whistleblower lawyer, or with a white collar defense lawyer, you can call the Firm at 347-746-1222.

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