On July 12, the U.S. Securities and Exchange Commission (SEC) announced a $9 million whistleblower award. The agency granted the award to an individual who voluntarily provided the agency with original information that contributed to the success of an enforcement action.
“The whistleblower in this case provided critical information and continuing assistance that helped the agency recover millions of dollars for harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.
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.
The award order outlines the factors the SEC weighed in determining the exact percentage to award the whistleblower: “(1) the significance of information provided to the Commission; (2) the assistance provided in the Covered Action; (3) the law enforcement interest in deterring violations by granting awards; (4) participation in internal compliance systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems.”
In Fiscal Year 2022, the SEC “awarded approximately $229 million in 103 awards, making FY 2022 the Commission’s second highest year in terms of dollar amounts and number of awards,” according to the Whistleblower Office’s Annual Report to Congress.
The report also states that “Enforcement actions brought using information from meritorious whistleblowers have resulted in orders for more than $6.3 billion in total monetary sanctions, including more than $4.0 billion in disgorgement of ill-gotten gains and interest, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.”
Further Reading:
SEC Awards Whistleblower More Than $9 Million