On November 19, the U.S. Securities and Exchange Commission (SEC) announced a $900,000 whistleblower award issued to an individual who provided significant and timely information on securities law violations occurring overseas. In the Final Order for the award, the SEC notes that the whistleblower’s information identified violations which would have been difficult to detect and led to a significant expansion of the SEC’s investigation.
“Today’s award underscores the significance of the SEC whistleblower program’s global reach,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “The agency has received whistleblower tips from individuals in 130 countries. Overseas whistleblowers are in a unique position to help identify wrongdoing occurring abroad that may otherwise be hard to detect.”
As Norberg notes, the SEC Whistleblower Program has a global reach. Conduct all over the world falls under the SEC’s jurisdiction and neither the entity committing the securities violation nor the whistleblower reporting the violation needs to be American in order for the whistleblower to be eligible for an 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.
The 2020 fiscal year (FY 2020) was a record-setting year for the SEC Whistleblower Program in a number of ways. The SEC’s recently released annual report on the program details that FY 2020 featured record figures for the number of whistleblower tips received, the number of award claims processed, the total dollar amount awarded, and the number of whistleblowers awarded.
This newly announced award continues a record-setting pace for the program to begin the 2021 fiscal year. Since the fiscal year began on October 1, the SEC has issued approximately $156 million to seven whistleblowers. The record for the total amount awarded in a single fiscal year is $175 million. The program is currently on pace to shatter that record.
As mandated by the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers. Thus the SEC does not disclose any information that may reveal a whistleblower’s identity.
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