On June 24, the U.S. Securities and Exchange Commission (SEC) announced a whistleblower award of over $1 million. The whistleblower provided information and assistance that led to multiple successful enforcement actions.
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 the protections is confidentiality; thus, the SEC does not disclose any identifying information about award recipients.
According to the award order, the whistleblower’s disclosure prompted the SEC to open an investigation and “was the underlying source that formed the basis for the charges in the Covered Action.” Furthermore, the whistleblower provided ongoing assistance to SEC staff during the investigation, “including by participating in two interviews with Commission staff, helping staff to understand the key players in the investigation, and providing information that was not otherwise accessible to staff.” The award order also notes that “there was
substantial law enforcement interest in the information” and that the whistleblower “suffered personal and professional hardships.”
“Today’s whistleblower played a critical role in the SEC bringing these important enforcement actions,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower. “The whistleblower’s information prompted the opening of the investigation, and their continued cooperation saved significant SEC staff time and resources.”
The SEC awards whistleblowers who provide information on a wide range of misconduct. In recent months, the SEC has demonstrated a new focus on environmental, social, and governance (ESG) issues. In March, the SEC listed climate-related risks as one of its 2021 examinations policies and announced the creation of a Climate and ESG Task Force in the Division of Enforcement. Advocacy groups claim that whistleblowers will play a central role in the SEC’s enforcement of ESG issues.
Recently, the SEC has been issuing whistleblower awards at a record pace. On June 21, the SEC issued over $5 million in whistleblower awards. Since the 2021 fiscal year began on October 1, 2020, the SEC has awarded approximately $376 million to 73 individuals – both fiscal year records. Overall, the SEC has awarded more than $938 million to 179 individuals since issuing its first award in 2012.
The 2021 fiscal year has also been a transitional period for the SEC Whistleblower Program. In April, Jane Norberg, the longtime Chief of the Office of the Whistleblower, departed the agency. That same month, Gary Gensler was confirmed as the new Chair of the SEC. Before his confirmation, Gensler pledged his support for the whistleblower program. He will be delivering keynote remarks at the National Whistleblower Center’s virtual event celebrating National Whistleblower Day 2021.