On January 21, the U.S. Securities and Exchange Commission (SEC) awarded over $40 million to four whistleblowers. The awards, which stem from three separate enforcement actions, were granted to whistleblowers who voluntarily provided the SEC with original information about securities law violations.
“Credible tips of securities laws violations are a valuable component of the Commission’s enforcement program,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “The critical information provided by these whistleblowers aided the Commission’s investigations and helped the Commission bring these successful enforcement actions.”
In the first award order, the SEC granted approximately $37 million to two joint whistleblowers who provided information which led to successful enforcement actions by the SEC and another agency. Through the SEC Whistleblower Program’s related action provisions, the whistleblowers’ award is based on the sanctions collected by both the SEC and the other agency. The award order notes that whistleblowers “helped the staff understand the evidence which also led the staff to identify additional valuable information that contributed to the Commission’s charges.”
In the second award order, the SEC awarded $1.8 million to a whistleblower who provided the agency with information that prompted an investigation into the alleged misconduct. According to the award order, the SEC’s charges were directly based on the whistleblower’s information and the whistleblower “provided substantial, ongoing assistance, including voluntary interviews and additional information and documents.”
In the third award order, the SEC awarded approximately $1.5 million to a whistleblower whose disclosure helped form the SEC’s investigative strategy. The award order notes that the whistleblower additionally “provided substantial and ongoing assistance to the Commission staff by helping the Commission staff understand the issues, which saved significant Commission staff time and resources.”
Through the SEC Whistleblower Program, qualified whistleblowers are entitled to a monetary award of 10-30% of funds recovered by the government when the sanctions that the government recovers exceed $1 million. The SEC considers a number of factors in determining the exact percentage of a whistleblower award. These include the significance of the whistleblower’s information, the degree of additional assistance that the whistleblower provides, the law enforcement interest in the whistleblower’s information, the timeliness with which the whistleblower made their disclosure, and whether the whistleblower was culpable in the misconduct.
The awards are the eighth, ninth, and tenth whistleblower awards issued by the SEC in January 2022. On January 6, the SEC awarded over $13 million to a whistleblower. On January 10, the SEC issued two whistleblower awards totaling more than $4 million. On January 11, the SEC issued four separate whistleblower awards. Overall, since issuing its first award in 2012, the SEC has awarded approximately $1.2 billion to 245 individuals.
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SEC Issues Awards Totaling More Than $40 Million to Four Whistleblowers