On September 17, the U.S. Securities and Exchange Commission (SEC) issued whistleblower awards totaling $11.5 million to two whistleblowers who provided the SEC with original information that helped lead to a successful enforcement action. The awards come two days after the SEC Whistleblower Program surpassed the $1 billion mark in total money awarded to whistleblowers.
The first whistleblower received a $7 million award and the second received a $4.5 million award. According to the SEC, the main reason for the discrepancy in award sizes was due to the timeliness with which the whistleblowers made their disclosures.
“The larger award was in recognition of the fact that the first whistleblower was the initial source that caused the staff to open the investigation into hard-to-detect violations and thereafter provided substantial assistance,” the SEC press release reads. “The second whistleblower, by comparison, submitted information later, after the investigation was already underway, and had delayed reporting to the Commission for several years after becoming aware of the wrongdoing.”
The award order also notes that the first whistleblower “made persistent efforts to remedy the issues, while suffering hardships.” It further states that the second whistleblower “provided information and documents, participated in staff interviews, and provided clear
explanations to the staff.”
“This case demonstrates the Commission’s continued commitment to rewarding individuals who provide high-quality tips, and particularly timely ones,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower. “These whistleblowers reported credible information that aided the Commission’s investigation and their subsequent cooperation allowed the Commission to better understand the violations that formed the basis of the enforcement action.”
Through the SEC Whistleblower Program, qualified whistleblowers are entitled to a monetary award of 10-30% of funds recovered by the government. In addition to monetary awards, the SEC Whistleblower Program offers anti-retaliation protections to whistleblowers. One of these protections is confidentiality; thus, the SEC does not disclose any identifying information about award recipients.
Since issuing its first award in 2012, the SEC has awarded over $1 billion to 212 individuals. In a press release issued when the whistleblower program surpassed the $1 billion milestone, SEC Chair Gary Gensler stated: “Today’s announcement underscores the important role that whistleblowers play in helping the SEC detect, investigate, and prosecute potential violations of the securities laws. The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.”
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