What issues might be the basis of whistleblower claims?

“Don’t tattle.” That’s the admonition many children receive while growing up. At least it used to be. The idea behind the reproach has been that telling when someone did something wrong was seen as being some sort of violation of loyalty or a nasty ploy to get someone in trouble.

These days, tattling doesn’t seem to carry so much of a stigma. In fact, in recent years, it has not only become acceptable, but it is outright encouraged. The federal government is arguably leading the charge through its programs for awarding payouts to whistleblowers that come forward with actionable information about alleged violations of the law.

The IRS has one such program to go after suspected tax evaders. In the securities law realm, the Securities and Exchange Commission, courtesy of the Dodd-Frank Act, holds the purse strings. And because of the complexities of that law, anyone who is considering taking such action are best advised to work with an attorney to be sure they preserve the protective benefits of the law.

That it can be lucrative to be a whistleblower is hard to dispute. In its most recent report on the program, the SEC said fiscal 2014 had been a particularly fruitful year. The agency reported that it issued payments to more sources in the past year than in all the years combined since beginning in 2011. In one, an individual received a record $30 million award.

So what kinds of evidence might support a whistleblower claim to the SEC? There are several. They include:

  • Information about manipulations of stock prices or shares
  • Activities involving the sale of fraudulent securities
  • The dissemination of false information about a company and its performance
  • Theft of funds or securities
  • Issues of fraud or other malfeasance related to municipal securities deals or public pensions
  • Evidence of violations of the Foreign Corrupt Practices Act

Regardless of how one views whistleblowing, there is no denying that it is enjoying something of a heyday right now. However, it carries risks and that means it shouldn’t be pursued without a full understanding of relevant law.