15 U.S. Code § 78u–6 - Securities whistleblower incentives and protection
In this section the following definitions shall apply:
(1) Covered judicial or administrative action
The term “covered judicial or administrative action” means any judicial or administrative action brought by the Commission under the securities laws that results in monetary sanctions exceeding $1,000,000.
(3) Original information
The term “original information” means information that—
(B) is not known to the Commission from any other source, unless the whistleblower is the original source of the information; and
(4) Monetary sanctions
The term “monetary sanctions”, when used with respect to any judicial or administrative action, means—
(5) Related action
The term “related action”, when used with respect to any judicial or administrative action brought by the Commission under the securities laws, means any judicial or administrative action brought by an entity described in subclauses (I) through (IV) of subsection (h)(2)(D)(i) that is based upon the original information provided by a whistleblower pursuant to subsection (a) that led to the successful enforcement of the Commission action.
(1) In general
In any covered judicial or administrative action, or related action, the Commission, under regulations prescribed by the Commission and subject to subsection (c), shall pay an award or awards to 1 or more whistleblowers who voluntarily provided original information to the Commission that led to the successful enforcement of the covered judicial or administrative action, or related action, in an aggregate amount equal to—
(A) not less than 10 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions; and
(c) Determination of amount of award; denial of award
(1) Determination of amount of award
The determination of the amount of an award made under subsection (b) shall be in the discretion of the Commission.
In determining the amount of an award made under subsection (b), the Commission—
(i) shall take into consideration—
(I) the significance of the information provided by the whistleblower to the success of the covered judicial or administrative action;
(II) the degree of assistance provided by the whistleblower and any legal representative of the whistleblower in a covered judicial or administrative action;
(III) the programmatic interest of the Commission in deterring violations of the securities laws by making awards to whistleblowers who provide information that lead to the successful enforcement of such laws; and
(2) Denial of award
No award under subsection (b) shall be made—
(A) to any whistleblower who is, or was at the time the whistleblower acquired the original information submitted to the Commission, a member, officer, or employee of—
(B) to any whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award under this section;
(C) to any whistleblower who gains the information through the performance of an audit of financial statements required under the securities laws and for whom such submission would be contrary to the requirements of section 78j–1 of this title; or
(1) Permitted representation
Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel.
(2) Required representation
(A) In general
Any whistleblower who anonymously makes a claim for an award under subsection (b) shall be represented by counsel if the whistleblower anonymously submits the information upon which the claim is based.
(e) No contract necessary
No contract with the Commission is necessary for any whistleblower to receive an award under subsection (b), unless otherwise required by the Commission by rule or regulation.
Any determination made under this section, including whether, to whom, or in what amount to make awards, shall be in the discretion of the Commission. Any such determination, except the determination of the amount of an award if the award was made in accordance with subsection (b), may be appealed to the appropriate court of appeals of the United States not more than 30 days after the determination is issued by the Commission. The court shall review the determination made by the Commission in accordance with section 706 of title 5.
(g) Investor Protection Fund
(1) Fund established
There is established in the Treasury of the United States a fund to be known as the “Securities and Exchange Commission Investor Protection Fund”.
(2) Use of Fund
The Fund shall be available to the Commission, without further appropriation or fiscal year limitation, for—
(3) Deposits and credits
(A) In general
There shall be deposited into or credited to the Fund an amount equal to—
(i) any monetary sanction collected by the Commission in any judicial or administrative action brought by the Commission under the securities laws that is not added to a disgorgement fund or other fund under section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246) or otherwise distributed to victims of a violation of the securities laws, or the rules and regulations thereunder, underlying such action, unless the balance of the Fund at the time the monetary sanction is collected exceeds $300,000,000;
(ii) any monetary sanction added to a disgorgement fund or other fund under section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246) that is not distributed to the victims for whom the Fund was established, unless the balance of the disgorgement fund at the time the determination is made not to distribute the monetary sanction to such victims exceeds $200,000,000; and
(B) Additional amounts
If the amounts deposited into or credited to the Fund under subparagraph (A) are not sufficient to satisfy an award made under subsection (b), there shall be deposited into or credited to the Fund an amount equal to the unsatisfied portion of the award from any monetary sanction collected by the Commission in the covered judicial or administrative action on which the award is based.
(A) Amounts in Fund may be invested
The Commission may request the Secretary of the Treasury to invest the portion of the Fund that is not, in the discretion of the Commission, required to meet the current needs of the Fund.
(B) Eligible investments
Investments shall be made by the Secretary of the Treasury in obligations of the United States or obligations that are guaranteed as to principal and interest by the United States, with maturities suitable to the needs of the Fund as determined by the Commission on the record.
(5) Reports to Congress
Not later than October 30 of each fiscal year beginning after July 21, 2010, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives a report on—
(A) the whistleblower award program, established under this section, including—
(D) the amount of earnings on investments made under paragraph (4) during the preceding fiscal year;
(E) the amount paid from the Fund during the preceding fiscal year to whistleblowers pursuant to subsection (b);
(h) Protection of whistleblowers
(1) Prohibition against retaliation
(A) In general
No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower—
(ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or
(i) Cause of action An individual who alleges discharge or other discrimination in violation of subparagraph (A) may bring an action under this subsection in the appropriate district court of the United States for the relief provided in subparagraph (C).
(ii) Subpoenas A subpoena requiring the attendance of a witness at a trial or hearing conducted under this section may be served at any place in the United States.
(iii) Statute of limitations
(I) In general An action under this subsection may not be brought—
Relief for an individual prevailing in an action brought under subparagraph (B) shall include—
(i) reinstatement with the same seniority status that the individual would have had, but for the discrimination;
(A) In general
Except as provided in subparagraphs (B) and (C), the Commission and any officer or employee of the Commission shall not disclose any information, including information provided by a whistleblower to the Commission, which could reasonably be expected to reveal the identity of a whistleblower, except in accordance with the provisions of section 552a of title 5, unless and until required to be disclosed to a defendant or respondent in connection with a public proceeding instituted by the Commission or any entity described in subparagraph (C). For purposes of section 552 of title 5, this paragraph shall be considered a statute described in subsection (b)(3)(B) of such section.
(B) Exempted statute
(C) Rule of construction
Nothing in this section is intended to limit, or shall be construed to limit, the ability of the Attorney General to present such evidence to a grand jury or to share such evidence with potential witnesses or defendants in the course of an ongoing criminal investigation.
(D) Availability to government agencies
(i) In general Without the loss of its status as confidential in the hands of the Commission, all information referred to in subparagraph (A) may, in the discretion of the Commission, when determined by the Commission to be necessary to accomplish the purposes of this chapter and to protect investors, be made available to—
(I) In general Each of the entities described in subclauses (I) through (VI) of clause (i) shall maintain such information as confidential in accordance with the requirements established under subparagraph (A).
(i) Provision of false information
A whistleblower shall not be entitled to an award under this section if the whistleblower—
(1) knowingly and willfully makes any false, fictitious, or fraudulent statement or representation; or
Source(June 6, 1934, ch. 404, title I, § 21F, as added Pub. L. 111–203, title IX, § 922(a),July 21, 2010, 124 Stat. 1841.)
References in Text
The Sarbanes-Oxley Act of 2002, referred to in subsec. (h)(1)(A)(iii), is Pub. L. 107–204, July 30, 2002, 116 Stat. 745. For complete classification of this Act to the Code, see Short Title note set out under section 7201 of this title and Tables.
This chapter, referred to in subsec. (h)(1)(A)(iii), was in the original “the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)”. This chapter, referred to in subsec. (h)(2)(D)(i), was in the original “this Act”. See References in Text note set out under section 78a of this title.
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