On August 23, the U.S. Securities and Exchange Commission (SEC) announced whistleblower awards totaling more than $99 million. In one award order, the SEC awarded more than $98 million to two whistleblowers whose disclosures contributed to a successful SEC enforcement action as well as successful related actions. In a second award order, the SEC awarded $1 million to whistleblowers who likewise voluntarily provided original information which contributed to the success of an enforcement action.
Through the SEC Whistleblower Program, qualified whistleblowers are eligible to receive monetary awards of 10-30% of the funds collected in enforcement actions which were aided by their disclosure. Overall, the SEC Whistleblower Program has now awarded more than $2 billion to whistleblowers since it was established in 2010.
$98 Million Award Order
In the $98 million award order, the SEC awarded $82 million to one whistleblower and $16 million to another.
According to the SEC, “the first whistleblower’s tip prompted the opening of the investigations, and thereafter provided critical additional information and ongoing assistance.”
The second whistleblower’s information “was provided later” but “significantly contributed to one aspect of the actions” the agency notes.
“Whistleblower information and cooperation play an integral role in the SEC’s enforcement efforts,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “Without these whistleblowers’ information, the violations would have been difficult to detect.”
$1 Million Award Order
In the $1 million award order, the SEC awarded $500,000 to joint whistleblowers as well as $500,000 to another individual whistleblower.
According to the award order, “Joint Claimants alerted the Commission to Issue A and caused Enforcement staff to open the investigation giving rise to the Covered Action. However, the Joint Claimants did not provide ongoing assistance and did not provide information to the Commission about Issue B.”
The individual whistleblower “alerted the Commission to Issue B, which helped increase the monetary sanctions the Commission was able to obtain from the respondent” and “engaged in a telephonic interview.”
SEC Whistleblower Program
The SEC Whistleblower Program was established in 2010 with the passage of the Dodd-Frank Act. The program has been an immense success. According to SEC Chair Gary Gensler, the program “has greatly aided the Commission’s work to protect investors.”
Overall, the SEC has awarded more than $2 billion to more than 400 individual whistleblowers.
The SEC Whistleblower Program had a record setting year in the 2023 Fiscal Year. The program issued nearly $600 million in whistleblower awards, the most ever in a fiscal year, including a $279 million award, the single largest award in program history. The whistleblower program also received a record 18,000 whistleblower tips over the course of the fiscal year.
Further Reading:
SEC Issues Awards Totaling $98 Million to Two Whistleblowers
SEC Whistleblower Program had a Record-Setting 2023 Fiscal Year