1. Submit Form TCR to the SEC
The SEC’s process for vetting and investigating tips starts when a whistleblower submits to the SEC a Form TCR — short for “Tips, Complaints, and Referrals” — describing the securities violation(s) he or she believes has occurred. It is crucial for any SEC whistleblower to submit his or her information using the Form TCR in order to remain eligible for a potential monetary award. Once the TCR is received by the SEC’s Office of the Whistleblower (OWB), the OWB will assign the submission a unique TCR number and send the number back to the whistleblower or the whistleblower’s attorney for record-keeping and tracking purposes.
2. The Office of Market Intelligence Vets Each Tip
After the tip is filed, the TCR is forwarded to the SEC’s Office of Market Intelligence (OMI), which has been described as a “point guard” for the entire agency. Comprised of more than 40 attorneys, former traders, accountants, and other experts, the OMI is responsible for gathering and analyzing all tips and complaints received by the SEC.
The OMI conducts an initial evaluation of each tip to determine, among other things, whether it relates to an existing investigation, whether similar information has already been submitted to the agency, and whether it relates to possible misconduct that occurred within the SEC’s ten-year statute of limitations for enforcement actions. Most importantly, the OMI determines whether the tip is sufficiently specific, significant, and credible to be referred to an investigative team within the Division of Enforcement — the division responsible for conducting investigations of possible securities violations and bringing charges against wrongdoers where warranted.
3. Tips May Be Referred to a Different Agency
If a tip is referred to an investigative team in the Division of Enforcement, it’s then up to enforcement attorneys to determine whether, and how best, to further investigate the tip. In some instances, the enforcement attorneys may determine the tip should not be pursued, either because it appears unlikely an actionable securities violation occurred or for some other reason. In some cases, the Division may determine the tip should be referred to a different government agency, such as the CFTC, IRS or Department of the Treasury. In many cases, though, the tip will be used as a valuable new lead in an existing SEC investigation or as the starting point for an entirely new SEC investigation. For particularly significant potential cases, the SEC may refer the tip to the criminal prosecutors at the Department of Justice and continue to investigate the case civilly.
4. Not All Tips Lead to Investigation
As the statistics above show, the SEC cannot launch a full-blown investigation into every new allegation, and instead must make difficult but necessary decisions about how best to allocate its resources. Because of resource constraints, especially after the recent reduction in federal workforce, it’s vital that any SEC whistleblower (whether using counsel or not) provide information to the SEC in a clear, compelling, detailed, and organized way, explaining exactly why he or she believes a securities violation has occurred and providing any supporting evidence. A thoughtful and organized tip is much more likely to catch the SEC’s interest than a vague, conclusory, or uncorroborated tip, giving both the SEC and the whistleblower a better chance at achieving a successful outcome.
Read more about the investigation process.
5. Using Counsel Can Increase Your Chances
No matter the source, when thinking about submitting a whistleblower tip to the SEC, our experience as senior attorneys in the trenches of federal securities law enforcement provides unique insight into the nature of misconduct and the quality of supporting evidence. We can leverage our long-standing relationships within the Government to increase our clients’ odds of success and our knowledge of the investigative process to mitigate our clients’ fear and anxiety.
Sometimes prospective clients find our firm because they read an article in a newspaper or watch a segment on television about our work. Sometimes other lawyers recommend our firm. Sometimes individuals are concerned about practices they observe in their workplace and, through an internet search, find they can request a free and confidential legal consultation.
As we regularly say, although the difficult decision about whether, how, and when to blow the whistle will depend upon the unique facts and circumstances of each case, knowledge is power. We know SEC whistleblowing, and we encourage our clients and prospective clients to read through our site to learn as much as they can, too.
Learn more about our award-winning whistleblower attorneys.
Think you have a tip for the SEC? Request a case evaluation, or call us at (212) 944-4040.
