Hi, I am Sean McKessy, Chief of the Office of the Whistleblower.
Thank you for your interest in the Whistleblower program.
We are often asked what happens after a whistleblower submits a tip, so today, I will walk you through
how the investigative process works, and your role as a whistleblower.
First, when you submit a tip, make sure you use the Form TCR, which is required for you
to be considered a whistleblower for this program.
It contains declarations of eligibility that you must sign off on.
You may submit anonymously and be part of the whistleblower program, but if you do submit
anonymously you must be represented by counsel.
When you submit a whistleblower tip, you will receive a TCR submission number.
Please retain this submission number for your reference, but don't worry if you lose it,
we will always be able to find your TCR by your name.
When your TCR is submitted to the SEC, our attorneys, accountants, and analysts will
review the data you submit to determine how best to proceed.
If it is a matter the Enforcement Division is working on already, the TCR gets forwarded
to the staff handling that matter.
Often a TCR gets sent to the experts in another Division at the SEC for their evaluation.
Even if your tip does not cause us to open an investigation right away, the information
you provide is retained and may be reviewed again in the future if more facts come to
light and a picture becomes clearer.
In any event, please know that each tip received is evaluated very soon after being received
by the SEC and it is looked at by at least two SEC attorneys.
If we need additional information to evaluate your tip, or to assist us in any resulting
investigation, we will contact you, or your attorney.
The best thing you can do to make your tip useful is to provide specific, timely, and
credible information.
For instance, a general claim that you think your next door neighbor is committing securities
fraud does not give our investigators much to go on – even if you are right.
Our staff will be much better able to pursue an investigation of your tip if they have
specific examples, details or transactions to examine.
So, the more information and specifics that you can provide to us to follow up on, the
better.
People often call us to ask if they should submit something, or submit an update, and
we will almost always suggest that you submit it.
As I often tell people, you never know what information may be the last piece of the puzzle
for an investigation.
Additionally, we explain that what may seem small or insignificant to you might be critical
to an ongoing investigation.
So, what happens if you submit your tip and it causes an SEC investigation?
Our enforcement staff will follow the facts to determine whether to charge an individual,
entity or both with securities law violations.
These investigation can take months or even years to be concluded.
Further, even after the investigation is complete and the Commission decides to file a case,
the case may be litigated, which may mean significant additional time before the case
is resolved.
So please understand that it can be a long time before a resolution to the matter is
final.
That said, once a matter in which over one million dollars in sanction is ordered is
final, we will post a Notice of Covered Action on our website.
You can sign up to receive an email each time we post a new one and you may also hear from
me or someone in the whistleblower office directly to let you know that the case that
you reported has been posted.
If you recognize the case you brought, you will have 90 days to submit a Form WB-APP
to apply for an award.
We will respond promptly to acknowledge receipt of your application.
From there, we will go into the deeper analysis required by the Commission’s rules to determine
whether to pay an award, and, if so, how much.
The Commission’s rules describe seven factors that we use to determine whether to increase
or decrease the percentage of an award.
The four factors that may increase an award are: (1) the significance of the information
provided by the whistleblower, (2) the assistance provided by the whistleblower (3) any law
enforcement interest that might be advanced by a higher award, and (4) the whistleblower’s
participation in internal compliance systems – as in, if you reported on a company that
you currently or used to work for, did you report internally first, and did you participate
in any internal investigation.
There are also three factors that can decrease the percentage of an award.
These are (1) culpability, (2) an unreasonable reporting delay and (3) interference with
internal compliance and reporting systems.
Please know, however, that even if of all these negative factors apply, you may still
be entitled to an award higher than the ten percent minimum.
You can find more information about each of these factors on our website, under the “Frequently
Asked Questions” section.
Let's sum up.
Please be aware of the following points.
The more specific, credible and timely the information you provide, the better it is
for our investigators to follow up on.
Please also send in any updates or developments that occur.
Understand the positive and negative factors the Commission considers in determining an
award percentage.
And finally, please be aware that that the securities laws can be very complex and that
SEC enforcement actions can take years to be finalized.
Thank you very much for listening today, if you have any questions, please call us at
(202) 551-4790, or visit the frequently asked questions section of our website, HYPERLINK
"http://www.sec.gov/whistleblower" www.sec.gov/whistleblower.