SEC Surpasses $1 Billion in Total Whistleblower Awards
On September 15, 2021, the Securities and Exchange Commission (the “SEC”) awarded approximately $110 million to a whistleblower whose information and assistance led to successful SEC and related actions.
With the award, the SEC’s whistleblower program has now paid more than $1 billion in awards to 209 whistleblowers, including over $500 million in fiscal year 2021 alone.
The $110 million award stands as the second-highest award in the program’s history, following the over $114 million whistleblower award the SEC issued in October 2020.
The $110 million award consists of an approximately $40 million award in connection with an SEC case and an approximately $70 million award arising out of related actions by another agency. The whistleblower provided significant independent analysis that substantially advanced the SEC’s and the other agency’s investigations.
A second whistleblower was awarded $4 million from the same SEC action. That whistleblower voluntarily provided original information that led to the successful enforcement action, but this information was provided to the SEC after the staff had opened the investigation and undertaken significant investigative steps, and was much more limited compared to the information and assistance provided by the first whistleblower.
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 any 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 [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.