On January 30, the U.S. Securities and Exchange Commission (SEC) awarded $1 million to a whistleblower who voluntarily provided the agency with original information that contributed to a successful enforcement action.
According to the award order, the whistleblower’s disclosure “was the initial source of the underlying investigation and caused the opening of the investigation.”
The whistleblower also “provided the Commission’s investigative staff with extensive and ongoing assistance during the course of the investigation, including identifying witnesses, and helping staff understand complex fact patterns and issues related to the matters under investigation,” according to the SEC.
Through the SEC Whistleblower Program, qualified whistleblowers are entitled to awards of 10-30% of the sanctions collected by the SEC in the case connected to their whistleblowing. To qualify for an award, an individual must voluntarily disclose original information to the SEC that contributes to the success of an enforcement action.
Alongside the award order, the SEC also issued a denial for a whistleblower award claim submitted for the same enforcement action. The SEC denied the claim because the claimant did not submit the claim within the 90-day deadline of when the SEC posts a Notice of Covered Action for the case.
According to the SEC, the denied claimant “failed to meet the demanding standard for showing that there were extraordinary circumstances beyond [his/her] control that caused the failure to file his/her award claim by the deadline.
So far in 2023 the SEC has issued a number of whistleblower awards. On January 24, the agency issued a $28 million award to four joint whistleblowers and on January 19 it announced that three whistleblowers who provided “information and assistance” that “led to a successful enforcement action” will receive $18 million.
Overall, the SEC has awarded more than $1.3 billion to over 300 whistleblowers since the program was established in 2010 with the passage of the Dodd-Frank Act.
The SEC Whistleblower Award Order
What is the SEC Whistleblower Program?