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Who Can Be a Whistleblower

A Whistleblower Can Be a U.S. Citizen or Foreign National

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), any person or group of persons who provide original information relating to a violation of the securities and commodities laws to the SEC/CFTC, in a manner established, by rule or regulation, by the SEC/CFTC can be a whistleblower.  Foreign nationals fall within the definition of a “whistleblower” when their information leads to a successful enforcement action brought in the United States by the SEC or CFTC (or other regulatory agency).  This is so even when the whistleblower resides overseas, submits the tip from overseas, and the misconduct complained of occurs overseas.

The Dodd-Frank Act prohibits the SEC and CFTC from providing a reward to a whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower provided information; who gains the information by auditing financial statements as required under the securities laws; who fails to submit information to the SEC as required by an SEC rule; or who is an employee of the DOJ or an appropriate regulatory agency, a self-regulatory organization, the PCAOB, or a law enforcement organization.

Once the list of excluded people is removed from consideration, it is clear that Congress intended whistleblowers to include current and former employees of corporation, vendors, competitors or anyone else who can provide original information about a violation of the securities/commodities laws.

Whistleblowers are Often Current and Former Employees

Experience shows that whistleblowers are often employees of the corporation that is violating the securities or commodities laws.  After all, employees are exposed to confidential or inside information about the inner workings of the corporation in which they work.  Such information often is almost always unavailable to third parties and regulators.

Job Title Does Not Make a Difference

Often an employee is exposed to information that may constitute a violation of the securities laws.  Although the SEC and CFTC considers such a person a valuable member in the fight against violations of the securities and commodities laws, the employee may feel his/her position within the corporation is not important enough for the SEC/CFTC to take his/her whistleblower claim seriously.  Nothing could be further from the truth.

Congress intended the SEC Whistleblower Program and the CFTC Whistleblower Program to receive information from anyone with original information, regardless of title or position.  It is often those employees who work in or around the fraudulent or illegal conduct who can offer the best original information about the securities or commodities law violation.

The SEC/CFTC Whistleblower Program May Reward Employee Participants in the Securities/Commodities Law Violation

In creating the whistleblower provisions under the Dodd-Frank Act, Congress recognized that employees with knowledge of a securities or commodities law violation often are participants in that violation.  Thus, participants in the violation can be whistleblowers as long as they are not convicted of criminal conduct relating to the violation.

Freiberger Haber LLP is dedicated to providing experienced, dedicated, and aggressive representation for whistleblowers looking to report violations of the federal securities and commodities laws to the SEC or CFTC.  If you have questions about your eligibility as a whistleblower under the SEC Whistleblower Program or CFTC Whistleblower Program, contact Freiberger Haber LLP.

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