The Dodd–Frank Wall Street Reform and Consumer Protection Act added Section 21F to the Securities Exchange Act of 1934, which establishes a program to reward individuals who blow the whistle on securities law violations. 15 U.S.C. § 78u—6(b). A whistleblower may report anonymously through an attorney.
The whistleblower award statute provides that the SEC may pay an award or awards to one or more whistleblowers who voluntarily provide original information to the SEC that leads to a successful SEC enforcement action. A whistleblower may be awarded between 10 and 30 percent of any monetary sanctions recovered by the SEC. Factors that influence the amount of the award include, inter alia, the significance of the information provided by the whistleblower to the success of the SEC enforcement action, and the degree of assistance provided by the whistleblower and any legal representative.
To be eligible for an award, a whistleblower must report information to the SEC using a form established by the regulator. The SEC must receive the form before the relevant statutes of limitation expire or while an enforcement action is pending. The statute of limitations for a catch-all securities fraud claim under Section 10 of the Exchange Act or Section 17 of the Securities Act is 2 years from discovery of the facts giving rise to the claim. The statute of repose is 5 years from the date of the violation.