SEC Awards Two Unique Whistleblower Awards
On November 13, 2020, the Securities and Exchange Commission (the “SEC”) announced an award of over $1.1 million to a whistleblower whose independent analysis led the staff to look at new conduct during an ongoing investigation.
The award is notable because it was a unique case where the receipt wasn’t a person, directly connected to the organization or individual that committed the fraud, sharing insider information, an encouraging sign for diligent shareholders or internet sleuths putting in the time to research and report potential fraudulent behavior.
According to the SEC press release, this whistleblower examined publicly available materials and conducted an analysis that revealed important new insights into the securities law violations, which helped the SEC protect investor assets from dissipation by the wrongdoer. The whistleblower’s information and exemplary assistance helped the agency bring an emergency action preventing further investor harm.
“Today’s award reflects the Commission’s commitment to award whistleblowers who provide high-quality independent analysis,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Whistleblowers who devote time and effort to develop unique insights may afford the Commission important information about possible securities laws violations.”
On November 19, 2020, the SEC announced an award of $900,000 to a whistleblower who identified securities law violations occurring overseas. The whistleblower’s timely and important information resulted in a significant expansion of an ongoing investigation.
“Today’s award underscores the significance of the SEC whistleblower program’s global reach,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “The agency has received whistleblower tips from individuals in 130 countries. Overseas whistleblowers are in a unique position to help identify wrongdoing occurring abroad that may otherwise be hard to detect.”
The SEC has awarded more than $721 million to 114 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.
For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower.
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 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.
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Brenda Hamilton, Securities Attorney
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