Qui Tam vs. SEC Whistleblower: Understanding the Differences.

Last Updated on: 4th August 2026, 01:33 am

• Qui tam lawsuits are subject to the False Claims Act (FCA)
• The FCA authorizes relators to sue on behalf of the United States
• SEC whistleblowers submit tips
• Whistleblowers cannot independently bring federal securities enforcement actions
• These are different roles
• Both may target the same underlying fraudulent scheme
• For example, a public company may fraudulently obtain benefits under a federal program while also misleading its investors about its business practices and finances
• These fraudulent practices could implicate both the FCA and federal securities law
• As a result, the same events could trigger both a qui tam lawsuit and an SEC whistleblowing action
• In many cases, it makes sense to pursue both
• Here are five key differences:
• FCA violations must involve federal money or property: FCA violations must affect federal funds, contracts, or programs
• SEC tips must concern possible federal securities-law violations: SEC tips must concern possible federal securities-law violations, such as financial-reporting fraud or market manipulation
• SEC tips may concern past, ongoing, or impending violations: SEC tips can concern past, ongoing, or impending violations. FCA lawsuits must be based on a false claim that has already been presented to the government, so they address completed or ongoing conduct rather than merely anticipated violations
• FCA “knowledge” includes actual knowledge, deliberate ignorance, and reckless disregard: Relators must have “knowledge” of a false claim, which includes actual knowledge, deliberate ignorance, or reckless disregard
• SEC disclosures must be based on independent or firsthand knowledge, not on speculation or suspicion: SEC disclosures must be based on independent knowledge or analysis

Who controls the case after I report the misconduct?

• Qui tam relators generally continue to serve as parties to their lawsuits, but not in every circumstance.
• A relator continues to serve as a party in federal district court after the DOJ intervenes.
• When the DOJ intervenes, it assumes primary responsibility for the prosecution of the relator’s claims under the FCA.
• When the DOJ declines to intervene, the relator may elect to litigate the FCA claims independently.
• SEC whistleblowers can file tips with the SEC but are not parties to securities enforcement proceedings.
• SEC whistleblowers can sue under anti-retaliation provisions of the Sarbanes-Oxley and Dodd-Frank Acts, but they cannot independently prosecute securities violations, particularly after the agency decides not to act.
• Relators file qui tam complaints in federal district court under seal.
• Relators must concurrently provide a copy of the complaint and material supporting evidence to the DOJ.
• Relators cannot disclose the existence of the complaint to any third party with limited exceptions.
• SEC whistleblowers submit tips using Form TCR.
• SEC tips are filed under the SEC’s whistleblower program, and whistleblowers may communicate their disclosure to the SEC’s Office of the Whistleblower.
• DOJ does not intervene in qui tam lawsuits every time.
• DOJ does intervene when the government’s resources or personnel are necessary or desirable for a relator’s FCA claim.
• DOJ may also decline intervention if it decides that the relator’s qui tam claims lack merit or if it believes that litigation is not in the public interest at that time.
• DOJ pursues qui tam litigation when it intervenes.
• The DOJ and U.S. Attorney’s Office may also litigate on the relator’s behalf, though the relator remains the party bringing the action.
• The SEC determines whether to pursue an enforcement action when a whistleblower submits a securities fraud tip.
• The SEC is not mandated to pursue enforcement actions that are based on whistleblower-initiated tips.
• If the SEC does not act, the whistleblower cannot require the SEC to pursue an enforcement action.
• DOJ may seek dismissal of a relator’s FCA claims after it intervenes.
• This is true even if the relator is opposed to dismissal, and it may lead to the termination of the relator’s involvement in the case as well.
• Because it is the SEC that makes the determination of whether to proceed with an SEC enforcement action, the whistleblower is not in a position to insist on continuing the agency’s case.

Will my identity stay confidential after I report?

• Qui tam complaints are filed “under seal,” and the FCA requires that they remain sealed for a period of “60 days or more.”
• While the FCA’s initial sealing period of 60 days is rarely extended for a long time, courts commonly extend relators’ FCA filing seals.
• After the DOJ declines to intervene in a relator’s case, the unsealing process begins.
• Defendants in FCA lawsuits normally learn about the existence of the complaint after the judicial unsealing.
• The unsealed complaint ordinarily reveals the relator’s identity, and the relator’s identity will be disclosed during the litigation that follows if the defendant chooses to litigate the case.
• To remain anonymous, SEC whistleblowers must be represented by an attorney.
• The SEC’s Office of the Whistleblower generally allows SEC tips to be filed anonymously, but the SEC requires that anonymous whistleblowers reveal their identities before it can award whistleblower compensation.
• These awards are only payable “where the whistleblower is not anonymous.”
• The SEC’s confidentiality policy states that “disclosure of information required by law, including in connection with any enforcement proceeding, will not be considered a violation of confidentiality.”
• While the FCA requires that complaints remain sealed, the FCA does not guarantee that the relator will be permanently anonymous.
• The FCA also contains specific protections for relators who file complaints under the FCA’s qui tam provisions.

Todd Spodek is the managing partner of Spodek Law Group, a second generation criminal defense firm that has been practicing since 1976.

Could timing or my role prevent me from qualifying?

• SEC whistleblowers must provide “voluntary” and “original” information to the SEC.
• SEC whistleblowers can file tips with the SEC and establish priority for an internal report if the tip is filed within 120 days of the internal report.
• A “qualifying agency request” can defeat the voluntariness of an SEC whistleblower’s submission, while a “disclosure to a supervisory authority” can defeat the submission’s “originality.”
• These are important considerations for SEC whistleblowers.
• Only individuals may qualify as SEC whistleblowers.
• Business entities, such as non-profit organizations, cannot receive whistleblower awards under the SEC’s whistleblower program.
• Both individuals and business entities can serve as relators in qui tam suits filed under the FCA.
• Only individuals are eligible to file SEC tips.
• Compliance and audit personnel who are specifically tasked with detecting, investigating, or reporting securities law violations are not eligible to receive SEC awards unless their disclosure:
• is necessary, in the personnel’s reasonable belief, to prevent the employer from engaging in conduct that is likely to cause substantial injury to the financial interest or property of the entity or investors, or
• is filed “after a period of 120 calendar days from the date on which the personnel first disclosed information to his or her supervisory authority in the matter.”
• These are two of several exceptions to the general rule of ineligibility that applies to compliance and audit personnel.
• The FCA contains a public-disclosure bar and a first-to-file rule that can both result in an ineligible whistleblower claim.
• The public-disclosure bar generally bars qui tam suits based on allegations that have already been publicly disclosed in a federal criminal, civil, or administrative hearing in which the government or its agent is a party, in a congressional, Government Accountability Office, or other federal report, hearing, audit, or investigation, or in the news media, unless the relator qualifies as an original source.
• The public-disclosure bar eliminates many claims for qui tam relators, because these are often duplicative of disclosure-related whistleblower claims.
• The first-to-file rule generally bars a relator from pursuing a qui tam action if another action relating to the same claims was filed earlier and it “remains pending.”
• The first-to-file rule is designed to ensure that the first relator who takes a risk to pursue the litigation receives the full reward.

How do awards, deadlines, and attorney fees differ?

• SEC awards are only payable to whistleblowers if their original information led to the successful enforcement of a covered action resulting in monetary sanctions exceeding $1,000,000.
• For whistleblowers that qualify, SEC awards are limited to “between 10 and 30 percent of the monetary sanctions collected” and “above $1,000,000.”
• Relators receive FCA rewards calculated based on the amount of money recovered by the government.
• Intervened FCA lawsuits generally yield 15% to 25% of recovered funds, and declined FCA lawsuits generally yield 25% to 30%.
• SEC awards have two primary deadlines: one to preserve the whistleblower’s priority date and one to claim the reward.
• The 120-day rule belongs to the SEC program alone; the False Claims Act imposes no 120-day deadline for filing a qui tam complaint.
• Whistleblowers are afforded 90 days to claim SEC awards after receiving notice that they may be eligible for such compensation.
• Whistleblowers that file claims for awards late are not entitled to SEC awards unless they have “good cause” to file their claim late.
• The FCA also prohibits relators from seeking awards if their claims were filed after the FCA’s statutory deadline had passed.
• The FCA’s statutory deadline is six years after the violation, or three years after the government official responsible for acting knew or reasonably should have known the material facts, but in no event more than ten years after the violation.

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• The DOJ makes the final determination of whether to pursue an FCA claim.
• A relator’s qui tam case does not have a “statutory deadline” for reporting a government fraud, although the DOJ denies anyone the right to interfere with its enforcement of the False Claims Act.
• In a DOJ intervention, the government also can seek to dismiss relators’ claims even if they are filed on time.
• These results may stem from an SEC award denial, which remains subject to federal appellate review.
• The FCA and SEC programs differ in how they compensate relators and whistleblowers in enforcement proceedings.
• A relator in a successful FCA case can recover his or her attorney fees, costs, and other litigation expenses from the defendant.
• This attorney-fee shifting makes the FCA program extremely promising to potential relators, even those with limited resources.
• The SEC program, on the other hand, does not contain a comparable attorney-fee shifting provision.
• Instead, SEC whistleblowers must rely on the fee percentages contained in their attorney-client fee agreements.
• These percentages range from 20% to 50%.

What retaliation protections apply if my employer targets me?

• Individuals who experience retaliation under the FCA have a right to seek reinstatement, double back pay, and special damages, interests, and attorney fees and costs.
• To qualify as Dodd-Frank retaliation plaintiffs, whistleblowers must have reported potential securities-law violations to the SEC.
• Whistleblowers who report a potential securities violation internally may have separate protection for their whistleblower actions under the Sarbanes-Oxley Act.
• Dodd-Frank retaliation plaintiffs can seek reinstatement, double back pay, interest, special damages, and attorney fees and costs.
• In contrast to the Dodd-Frank Act and the Sarbanes-Oxley Act, the FCA’s protection against retaliation does not require the whistleblower to have file a qui tam lawsuit, a securities-law violation tip with the SEC, or either one.
• If an individual files a Sarbanes-Oxley retaliation complaint, it must be filed with OSHA within 180 days after the adverse employment action.
• If a whistleblower files a Sarbanes-Oxley retaliation complaint, they must first file it with OSHA, but may bring a federal lawsuit if the Secretary has not issued a final decision within 180 days.
• The Department of Labor process may include an OSHA investigation, a hearing before a Department of Labor Administrative Law Judge, and review by the Department of Labor’s Administrative Review Board.
• Dodd-Frank’s anti-retaliation provision does not reach whistleblowers who report an alleged securities violation only internally; the Supreme Court has held that the individual must have reported the violation to the SEC, though a purely internal reporter may still be protected under the Sarbanes-Oxley Act.
• In these cases, the whistleblower can file a complaint directly in federal district court.
• Again, whistleblowers who are fired or disciplined as a result of filing complaints under the False Claims Act are not restricted to seeking redress under state law.
• They can pursue whistleblower retaliation claims under the FCA.
• To pursue a whistleblower retaliation claim under the FCA, relators generally must bring the claim in federal district court.
• These plaintiffs bring their retaliation claims as civil actions in federal district court within three years of the retaliation, and there is no requirement, or ability, to file the claim first with the Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), or any other agency.

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