SEC Whistleblower Program Dishes Out $23 Million in Awards

SEC Awards

After a few weeks with no award orders, the U.S. Securities and Exchange Commission (SEC) issued $23 million in whistleblower awards from July 15 to 19. On July 15, the SEC issued two separate whistleblower awards totaling $6 million to whistleblowers who provided the agency information and assistance. On July 19, the SEC awarded $17 million to a whistleblower who provided information and assistance which led to a covered SEC action and a related action by another agency.

Qualified SEC whistleblowers, individuals who provide original information that leads to a successful SEC enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government. Under the Dodd-Frank Act’s related action provisions, the SEC pays whistleblower awards when other government agencies carry out enforcement actions based on information originally provided to the SEC. Related-action awards are also for 10-30% of the funds recouped in the actions.

The first award issued on July 15, was a $3 million award granted to an individual who was solicited to invest in a product that they believed was being misrepresented. According to the SEC, the whistleblower “expeditiously alerted the SEC to the potential misconduct, which prompted the opening of the investigation, and continued to cooperate with the SEC’s Enforcement staff.”

The second award from July 15 was also for $3 million. The SEC granted the award to a whistleblower who “raised concerns internally, and thereafter submitted a detailed tip that prompted the opening of the investigation, met with the Enforcement staff multiple times, identified key witnesses and documents, and provided supplemental information during the investigation,” according to the award order.

“When confronted with potential wrongdoing, today’s whistleblowers refused to look the other way, but instead, chose to do the right thing by reporting it to the SEC,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower, in a press release about the July 15 awards. “Insiders and outsiders alike can make a tremendous impact on the SEC’s ability to detect misconduct and protect investors when they decide to become whistleblowers.”

The SEC issued the $17 million award from July 19 to a whistleblower whose disclosure prompted SEC staff to open a new investigation. According to the award order, the whistleblower “also provided Enforcement staff with detailed information and documents early in the investigation,” and “offered ongoing assistance by, among other things, speaking with the Enforcement staff on several occasions.” The information provided by the whistleblower to the SEC was also used in a related enforcement action by another agency.

“Today’s award underscores the SEC’s commitment to rewarding meritorious whistleblowers who provide valuable information and exemplary cooperation that advance the agency’s enforcement efforts,” said Kelly in a press release about the award.

Overall, the SEC has awarded approximately $1.3 billion to 276 individual whistleblowers since issuing its first award in 2012.


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