Whistleblower Award $14 Million Bounty By SEC

SEC Whistleblower - Dodd Frank Act
Securities Lawyer 101 Blog

On October 1, 2013, the Securities and Exchange Commission (the “SEC”) announced it had awarded more than $14 million to a whistleblower whose information led to an SEC enforcement action that recovered substantial investor funds.  Payments to whistleblowers are made from a separate fund previously established by the Dodd-Frank Act and do not reduce amounts paid to investors. The award is the largest made by the SEC’s whistleblower program since its inception in 2011.

The SEC’s whistleblower program rewards high-quality original information that results in an SEC enforcement action with sanctions exceeding $1 million.

The bounties under the SEC whistleblower program range from 10 percent to 30 percent of the amount collected in an SEC action.

SEC Chair Mary Jo White, “Our whistleblower program already has had a big impact on our investigations by providing us with high quality, meaningful tips… We hope an award like this encourages more individuals with information to come forward.”

The whistleblower who received the large bounty desires to remain anonymous. As required by the Dodd Frank Act, the whistleblower provided original information to the SEC which allowed the SEC to investigate quickly.  Less than six months after receiving the whistleblower’s tip, the SEC was able to bring an SEC enforcement action and charges against the fraudsters while securing investor funds.

“While it is certainly gratifying to make this significant award payout, the even better news for investors is that whistleblowers are coming forward to assist us in stopping potential fraud in its tracks so that no future investors are harmed,” said Sean McKessy, chief of the SEC’s Office of the Whistleblower.

According to the SEC, its first payment to a whistleblower was made in August 2012.  Additional payments were made in August and September 2013, to three whistleblowers who helped the SEC and the U.S. Department of Justice halt a sham hedge fund.

 By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose any information that might directly or indirectly reveal a whistleblower’s identity.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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