When an employee in Minnesota decides to “blow the whistle” on an employer for illegal actions, there is the general understanding that the employee will be protected after filing such a claim. Moreover, in some instances, a whistleblower’s rights also include the ability to collect an award related to the claim. However, whistleblowers might have to wait some time until they are paid off.
The whistleblower program that is part of the Securities and Exchange Commission has generally promised to move quickly on any useful information provided to them regarding potential wrongdoings. However, the agency has had some difficultly this year living up to those terms. This has resulted in a large delay in paying of tipsters.
According to current data, of the 297 whistleblowers that applied for awards since 2011, roughly 83 percent of them have not received a decision from the Securities and Exchange Commission. In some instances, these claims have been delayed well over two years from their filing dates.
While this whistleblower program imposes strict deadlines to those filing claims, the agency has no timeframe or time limits to responding to these claims submitted. This backlog in claims not only means that whistleblowers will have to wait a long time to receive an award, but it could also mean larger issues for the program in general.
While the program seeks to increase the agency’s effort to root out securities fraud and promote reporting of any information related to these illegal acts, the backlog in paying out awards may hinder this effort. While these claims often involve very complex issues and require much time to make a ruling, the slow and delayed process could hurt the efforts of the program. Whether whistleblowers are reporting securities fraud or another illegal act, they should understand the process.
Source: The Wall Street Journal, “SEC Backlog Delays Whistleblower Awards,” Rachel Louise Ensign and Jean Eaglesham, May 4, 2015