SEC Whistleblower Protections:  Confidentiality

One of the available SEC whistleblower protections is confidentiality.  SEC whistleblower confidentiality means that while the SEC knows who the whistleblower is, it cannot reveal the whistleblower’s name or identity to anyone outside of the SEC, with certain exceptions.

SEC whistleblower confidentialityOut of all of the SEC whistleblower protections, confidentiality is the only one that is automatically granted to all qualified SEC whistleblowers by the SEC whistleblower statute, without the whistleblowers having to do anything further on their own.

Through the date when this page was first posted, the SEC appears to have taken SEC whistleblower confidentiality seriously.

 

SEC Whistleblower Confidentiality, Generally

Generally speaking, under the SEC whistleblower program, the SEC cannot disclose any information that could reasonably be expected to reveal the whistleblower’s identity.  This includes, but is not limited to, identifying information provided by the whistleblower to the SEC. (15 U.S.C. § 78u-6(h)(2)(A).)

Confidentiality In Public SEC Proceedings

There are some narrow exceptions to SEC whistleblower confidentiality, though.  For example, according to the SEC whistleblower rules, the SEC can disclose information that could reveal a whistleblower’s identity in a federal court case or in an administrative action brought by the SEC, if it is “required” to do so.  This might happen if the SEC brings a case in federal court and the judge orders the SEC to disclose the information.

However, it is common for defendants to settle with the SEC during the SEC’s investigation, before any case is filed in court.  In such situations, the issue of disclosing a whistleblower’s identity would most likely not arise.

Far fewer SEC investigations end up as court cases.  In SEC whistleblower cases that do end up in court, the judge might decide not to order the SEC to provide the information anyway.  Alternatively, the judge could decide to allow the SEC to redact (black out) the whistleblower’s name and other identifying information from documents before turning the documents over.

Providing Information To Other Government Agencies

Another limited exception is that if the SEC determines that it is necessary to accomplish the purposes of the Securities Exchange Act of 1934 and to protect investors, it can provide a whistleblower’s information to certain government agencies or regulatory authorities.  However, those agencies and authorities are required to maintain the whistleblower’s information as confidential, just like the SEC. (See 15 U.S.C. §78u-6(h)(2)(d)(ii)(I).)

Those government agencies and regulatory authorities include:

    • The U.S. Attorney General,
    • A State attorney general in connection with a criminal investigation,
    • An appropriate Federal or State regulatory authority,
    • A self-regulatory organization like the NYSE or FINRA, and
    • The Public Company Accounting Oversight Board.

In addition, the SEC can disclose the information to a foreign securities authority or foreign law enforcement authority, provided that they “maintain the whistleblower’s information in accordance with such assurances of confidentiality” as the SEC deems appropriate.  (15 U.S.C. §78u-6(h)(2)(d)(ii)(II).)

Orders, Statistical, And Miscellaneous Uses

The SEC is allowed to reveal a whistleblower’s identity under certain conditions set forth in 5 U.S.C. §552, only one of which is likely of particular interest to SEC whistleblowers:  the SEC is allowed to reveal information in its final opinions and orders, such as when it rules on cases or enters orders granting or denying claims for SEC whistleblower awards.  But just because the SEC is “allowed to” do something, that does not mean that it does so in practice.

Through the date when this page was first posted, the SEC has kept its whistleblowers’ identities out of its orders, and it has redacted whistleblowers’ names and identifying information from its determinations of award claims.

In addition, the SEC is allowed to reveal information in accordance with 5 U.S.C. § 552a.  In broad terms, that statute allows a government agency to provide information to its employees for use in performing their regular duties; for statistical purposes, such as to the U.S. Bureau of the Census; or for various other miscellaneous uses.  Often those uses do not actually require disclosing a particular whistleblower’s identity, such as when the SEC presents aggregated statistics about the SEC whistleblower program generally.

Additional Information

The SEC takes SEC whistleblower confidentiality seriously, and has been guarding whistleblowers’ identities zealously.

It should be kept in mind that SEC whistleblower confidentiality and anonymity are different protections.  For information about what “anonymity” means in the context of the SEC whistleblower program, click here.

If any of these statutes or rules raise questions, a potential whistleblower should consider looking them up and/or consulting with an SEC whistleblower lawyer from a reputable SEC whistleblower law firm.

For more information about SEC whistleblower confidentiality, click the link below: