Private Enforcement Of SEC Whistleblower Anti-Retaliation Rights

SEC whistleblower anti-retaliation rights protect employees who blow the whistle on securities frauds or violations to the U.S. Securities and Exchange Commission from being retaliated against by their employers.

SEC whistleblower anti-retaliation rightsPrivate individuals can enforce their SEC whistleblower anti-retaliation rights by bringing their own civil lawsuits in federal court.

When people speak of the private enforcement of SEC whistleblower protections, they are usually referring to lawsuits filed in court by the SEC whistleblowers themselves.

In addition, in many types of SEC whistleblower cases, the SEC can also bring its own judicial or administrative actions to enforce SEC whistleblower anti-retaliation rights.  For more information about SEC enforcement of SEC whistleblower protections, click here.

How SEC Whistleblower Anti-Retaliation Rights Operate

When the U.S. Congress created the SEC whistleblower program, it included provisions that granted SEC whistleblower anti-retaliation rights, to protect employees from being retaliated against by their employers for blowing the whistle on frauds to the SEC.

The SEC whistleblower statute prohibits employers from taking any actions to retaliate against SEC whistleblowers in the terms and conditions of their employment. These SEC whistleblower anti-retaliation rights apply to any lawful act the SEC whistleblower does to:

    • Provide the SEC with information about violations of the federal securities laws,
    • Initiate, assist with, or testify in an SEC investigation, lawsuit, or administrative action based on or related to the information that the whistleblower provided to the SEC,
    • Make disclosures to the SEC that are required or protected by the Sarbanes-Oxley Act, or
    • Make disclosures to the SEC that are required by any other law, rule, or regulation that is subject to the SEC’s jurisdiction.

The Deadline To File A Private Anti-Retaliation Lawsuit

The SEC whistleblower statute gives individuals the right to bring their own personal lawsuits in a U.S. District Court (federal court) if they are fired or retaliated against by their employers in violation of their SEC whistleblower anti-retaliation rights.

In that lawsuit, the SEC whistleblower will be called the “plaintiff”.  The SEC whistleblower’s employer (or former employer) will be called the “defendant”.

This lawsuit must be filed within a certain period of time, which varies depending on the circumstances. The time period to file a lawsuit is sometimes referred to as a “statute of limitations”.  (See 15 U.S.C. § 78u-6(h)(1)(B)(iii).)

Relief For An SEC Whistleblower In A Private Anti-Retaliation Lawsuit

The SEC whistleblower statute lists specific types of relief for an individual who wins an anti-retaliation lawsuit:

    • One of the things that a prevailing plaintiff can get is two (2) times the amount of back pay that would otherwise be owed to him or her, with interest.
    • If the SEC whistleblower was fired, he or she can be awarded reinstatement to his or her job, with the same seniority status that he or she would have had if he/she had not been retaliated against.
    • Whether the SEC whistleblower was fired or not, he or she can recover compensation for litigation costs, expert witness fees, and reasonable attorneys’ fees.

People Who Do Not Receive SEC Whistleblower Awards Can Still Assert Their SEC Whistleblower Anti-Retaliation Rights

There is a difference between being qualified as an SEC whistleblower, and being qualified to receive an SEC whistleblower reward.

An SEC whistleblower is someone who reports a securities fraud or violation to the Securities and Exchange Commission in accordance with the SEC whistleblower statute and the SEC’s Rules governing its whistleblower program.  That person may or may not end up receiving an SEC whistleblower award later on, and there are separate rules and procedures for that.

An award recipient is an SEC whistleblower who also happens to receive a monetary award from the SEC.

It is possible for some people to be SEC whistleblowers, without also satisfying the terms and conditions set forth in the SEC whistleblower rules about eligibility to receive SEC whistleblower awards.

To be able to claim SEC whistleblower anti-retaliation rights, an individual needs to satisfy the requirements set forth in the SEC whistleblower statute for being an SEC whistleblower.  (See 15 U.S.C. § 78u-6(a)(6) and § 78u-6(h).)

However, the SEC whistleblower statute does not say that the individual must receive an SEC whistleblower reward to be entitled to have SEC whistleblower anti-retaliation rights.

Additional Information

For more information about private enforcement of SEC whistleblower protections, click on the link below: