On March 1, the U.S. Securities and Exchange Commission (SEC) announced an award of over $500,000 to be split between two whistleblowers. The SEC states that the whistleblowers provided tips that “revealed an ongoing fraud and resulted in multiple SEC actions and a related action from another government agency.” According to the SEC, “[b]oth whistleblowers provided substantial, ongoing assistance that conserved the agencies’ time and resources.”
“This case demonstrates once again the value of the whistleblower program in helping to protect investors, and the Commission’s continued commitment to rewarding individuals who provide high-quality tips,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “The timely reporting of credible information by these whistleblowers provided the Commission the opportunity to quickly investigate and address misconduct that was actively harming investors.”
Through the SEC Whistleblower Program, qualified whistleblowers, or individuals who voluntarily provide the SEC original information that leads to a successful enforcement action, are entitled to monetary awards. “Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million,” the press release states. The SEC pays whistleblower awards through a fund that is entirely financed through monetary sanctions paid to the SEC by securities law violators. The SEC Whistleblower Program also provides anti-retaliation protections to whistleblowers, including confidentiality.
The SEC Whistleblower Program has had a record-breaking 2021 fiscal year so far. On January 14, 2021, the SEC broke the record for the amount of money awarded to whistleblowers and continues to increase the number of whistleblower awards issued. The previous record was set in the 2020 fiscal year, when the SEC doled out $175 million to 39 individuals. Since the first SEC whistleblower award was issued in 2012, the Commission “has awarded approximately $753 million to 140 individuals,” according to the press release.
SEC Awards Over $500,000 to Two Whistleblowers