On December 18, the U.S. Securities and Exchange Commission (SEC) announced three separate whistleblower awards totaling over $3.6 million. The awards stem from three separate enforcement actions which were aided by information provided by whistleblowers.
In the first order, the SEC awarded over $1.8 million to a whistleblower who provided significant information about a fraudulent scheme. According to the SEC, the whistleblower “took immediate steps to mitigate the harm to investors, and provided substantial assistance to the staff, including providing testimony, key documents, and other information.”
In the second order, a whistleblower was awarded more than $1.2 million for providing significant information. In making the award determination the SEC negatively assessed the whistleblower’s culpability in the fraudulent scheme and the “unreasonable delay” in reporting to the SEC.
In the third order, the SEC awarded more than $500,000 to a whistleblower. The whistleblower provided both original information and ongoing assistance to the SEC. In the award determination process the SEC negatively assessed the whistleblower’s “unreasonable delay” in reporting the violations. However, in issuing the award, the SEC did choose to waive the TCR filing requirement because of the specific circumstances of the case: the whistleblower’s attorney misled the whistleblower and filed a TCR under their own name. This is the second time this month the SEC has used its discretion to waive the TCR filing requirement when issuing an award.
“Today’s three awards demonstrate the SEC’s continuing commitment to making awards to individuals who provide high-quality information that assists the agency in bringing successful enforcement actions,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “These awards also show that the Commission will take into account the unique facts and circumstances of each matter, in accordance with the whistleblower rules, when determining eligibility and the amount of the award.”
Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government. Whistleblower award payments are made out of a fund entirely financed through monetary sanctions paid to the SEC by securities law violators.
Only a few months into the fiscal year, the SEC is nearing its record for the largest monetary amount of whistleblower rewards issued in a single year. In the 2020 fiscal year, the SEC Whistleblower Program set a record by issuing whistleblower awards totaling approximately $175 million. Since the 2021 fiscal year began on October 1, the SEC has awarded approximately $174 million to 21 individuals.
The SEC Whistleblower Program provides anti-retaliation protections to whistleblowers, including confidentiality. Therefore, the SEC does not disclose any information which may reveal a whistleblower’s identity.