Many factors affect the amount of an award. The SEC may increase the amount of an award based on the following factors:
-
The significance of the tip to the success of any proceeding brought against wrongdoers. A tip’s significance depends on, for example:
-
the nature of the reported information, including whether the information’s reliability and completeness allowed the SEC to conserve resources; and
-
the degree to which the information supported one or more successful claims brought by the SEC or related actions brought by other regulatory or law-enforcement authorities.
-
-
The extent of the assistance that you and your legal representative provided in the SEC action or related action. Considerations include:
-
whether you provided ongoing, extensive, and timely cooperation and assistance;
-
the timeliness of your initial report to the SEC or to your employer;
-
the resources conserved because of your assistance;
-
whether you appropriately encouraged or authorized others, who might otherwise not have participated in the investigation or related action, to assist SEC staff;
-
your efforts to remediate the harm caused by the violations; and
-
any unique hardships you experienced as a result of blowing the whistle.
-
-
The SEC’s law-enforcement interest in deterring the specific violation. Consider factors such as:
-
how much an award enhances the SEC’s ability to enforce the federal securities laws and protect investors;
-
the degree to which an award encourages the submission of high-quality information;
-
whether the specific violation is an SEC priority; and
-
the dangers of the specific violation to investors.
-
-
Whether, and the extent to which, you participated in your company’s internal compliance and reporting systems. Think about:
-
whether you reported internally before, or at the same time as, you reported to the SEC; and
-
whether you assisted any internal investigation concerning the violation.
-
Conversely, the SEC may reduce the amount of an award based on these considerations:
-
If you participated in, or were culpable for, the securities-law violation(s) you reported. Consider the following:
-
your role in the violation;
-
your education, training, experience, and position of responsibility at the time the violation occurred;
-
whether you acted knowingly and intentionally;
-
whether you financially benefitted from the violation;
-
whether you committed a violation in the past;
-
the egregiousness of the underlying violation; and
-
whether you knowingly interfered with the SEC’s investigation of the violation.
-
-
If you unreasonably delayed reporting the violation(s) to the SEC. This determination is based on:
-
whether you failed to take reasonable steps to report or prevent the violation from occurring or continuing;
-
whether you were aware of the violation but reported to the SEC only after learning of an investigation into the misconduct; and
-
whether there was a legitimate reason for you to delay reporting the violation.
-
-
If you interfered with your company’s internal compliance and reporting systems. Consider whether you knowingly:
-
interfered with your company’s reporting systems to prevent or delay detection of the violation; or
-
made materially false statements, or provided false documents, to hinder your company’s ability to detect, investigate, or remediate the violation.
-
To learn more about the SEC Whistleblower Program, download the eBook SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.