On September 21, the U.S. Securities and Exchange Commission (SEC) announced a $2.4 million whistleblower award granted to a whistleblower whose initial disclosure and continued cooperation with the agency led to a successful enforcement action which stopped ongoing misconduct.
“The whistleblower awarded today quickly came forward with critical information and helped investigative staff target key information and identify important witnesses,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Information from whistleblowers has again proven to be crucial in helping the Commission detect violations and better protect investors and the marketplace.”
The award continues a recent flurry of activity for the SEC Office of the Whistleblower. This is the sixth award granted in the last three weeks. The SEC has now given whistleblower awards to a record-setting thirty individuals this fiscal year. Since issuing its first award in 2012, the SEC has awarded approximately $523 million to 97 individuals.
Qualified SEC whistleblowers, individuals who provide the agency with original information that leads to a successful enforcement action, are entitled to a whistleblower award of 10-30% of the money recouped by the government. The SEC Whistleblower Program additionally provides anti-retaliation protections to whistleblowers, including confidentiality. The SEC will thus not disclose any information which could reveal the identity of the whistleblower.
On September 23, the SEC will vote on proposed changes to the whistleblower program. Whistleblower advocates warn that a number of these changes would significantly undermine the efficacy of the program. For example, a proposed “soft cap“ on the largest whistleblower awards would disincentivize whistleblowers and weaken the deterrent effect of the program.