On October 29, the U.S. Securities and Exchange Commission (SEC) announced a whistleblower award of over $10 million. The whistleblower’s disclosure led to the opening of an SEC investigation and the whistleblower subsequently provided ongoing assistance to the investigation.
“After reporting internally and receiving no satisfactory response, the whistleblower alerted the agency to the securities violation and played a critical role during the investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Today’s award demonstrates the significant contributions that whistleblowers can make to substantially assist investigations and help the Commission save time and resources.”
According to the SEC, “in more than a dozen communications with the staff, the whistleblower provided key evidence, helped decipher communications, and distilled complex issues.” A recent analysis of SEC award orders highlighted the importance of ongoing assistance in the SEC’s award determination process.
Qualified SEC whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government. Whistleblower award payments are made out of a fund entirely financed through monetary sanctions paid to the SEC by securities law violators.
Last week, the SEC issued a $114 million whistleblower award – the largest in SEC history. Since issuing its first award in 2012, the SEC has awarded approximately $687 million to 109 individuals. “Whistleblowers make important contributions to the enforcement of securities laws and we are committed to getting more money to whistleblowers as quickly and as efficiently as possible,” SEC Chairman Jay Clayton said in a press release for the record-breaking award.
In addition to monetary awards, the SEC Whistleblower Program provides anti-retaliation protections to corporate whistleblowers. These protections include confidentiality. Thus, the SEC does not disclose any information that may reveal a whistleblower’s identity.