Whistleblower Receives Over $1.25 Million SEC Whistleblower Award

U.S. Securities and Exchange Commission building in Washington, D.C. September 4, 2014. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

On August 31, the Securities and Exchange Commission (SEC) announced a whistleblower award of over $1.25 million. According to the SEC’s press release, the whistleblower provided “significant information” that “prompted the agency to initiate a cause examination and bring an enforcement action that resulted in the return of millions of dollars to harmed investors.”

The SEC’s Order Determining Whistleblower Award Claim states that the whistleblower did not contest the Claims Review Staff’s initial recommendation for the award amount. The Commission then adjusted the award amount “after considering the administrative record” and decided that the whistleblower in the case should be awarded over $1,250,000 for the “original information” provided, which “led to the successful enforcement of the Covered Action.” The SEC concluded that the final award total was “appropriate” because of the speed with which the whistleblower “alerted Commission staff to the potential wrongdoing” as well as the successful outcome of the enforcement action.

“The whistleblower’s expeditious reporting alerted the agency to previously unknown securities violations,” said Chief of the SEC’s Office of the Whistleblower Jane Norberg. “This whistleblower’s vigilance and prompt reporting helped the agency move quickly to protect investors, resulting in the return of millions of dollars to harmed investors.”

Through the SEC Whistleblower Program, individuals, who willingly provide original information that leads to a successful enforcement action, are entitled to a monetary award ranging from 10 to 30% of funds the government recovers, “when the monetary sanctions exceed $1 million.”

Since the first SEC whistleblower award in 2012, 90 individuals have been awarded over $507 million from the SEC Office of the Whistleblower. SEC whistleblower awards are financed entirely through monetary sanctions paid to the SEC by securities law violators, and no money is withheld from harmed investors to pay whistleblower awards. Additionally, the 2010 Dodd-Frank Act requires that the SEC preserve whistleblowers’ confidentiality.

Read the SEC press release.

Read the SEC Order Determining Whistleblower Award Claim.

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