On November 30, the U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower posted eighteen new Notices of Covered Actions (NCAs). Each NCA relates to a specific SEC enforcement action and signals that individuals may now submit whistleblower award claims for these actions. Whistleblowers have until February 28, 2021 to apply for an award for these newly posted NCAs by submitting a completed Form WB-APP to the SEC Office of the Whistleblower.
The newly posted NCAs cover a range of enforcement actions and deal with a wide variety of types of corporate fraud and misconduct. For example, one NCA covers a $35 million settlement with J.P. Morgan for charges of manipulative trading of U.S. Treasury securities, while another NCA covers an approximately $10 million settlement with a motion picture financier who allegedly fraudulently misappropriated millions of dollars from investors. The most notable of the eighteen new NCAs covers the over $1 billion settlement with Goldman Sachs for violations of the Foreign Corrupt Practices Act (FCPA). A whistleblower award for this case could be the largest award in SEC Whistleblower Program history.
Qualified SEC whistleblowers, individuals who voluntarily provide the SEC original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government. According to the SEC, “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.”
By posting an NCA, the SEC is not making any determination that the relevant case was aided by a whistleblower tip. Rather, the SEC posts an NCA for any enforcement action that results in monetary sanctions exceeding $1 million. The notices simply alert whistleblowers who may have contributed to the enforcement action that they can now file for whistleblower awards.
The SEC Whistleblower Program has issued whistleblower awards at a record-setting pace to begin the 2021 fiscal year. Since the fiscal year began on October 1, the SEC has issued approximately $166 million to twelve individuals. The record for the total amount awarded in a single fiscal year $175 million, set in the 2020 fiscal year. The program is currently on pace to shatter that record.
