On April 4, the U.S. Securities and Exchange Commission (SEC) issued two whistleblower awards totaling nearly $250,000. The awarded whistleblowers voluntarily provided the agency with original information about securities law violations. Their information caused the SEC to open an investigation which resulted in a successful enforcement action.
Through the SEC Whistleblower Program, qualified whistleblowers are entitled to a monetary award of 10-30% of funds recovered by the government when the sanctions that the government recovers exceed $1 million.
The SEC granted one whistleblower an award of approximately $160,000 and the second whistleblower an award of approximately $80,000. The discrepancy in award sizes reflects the SEC’s determination that the first whistleblower’s information and assistance were more helpful to the investigation.
According to the award order, the first whistleblower “provided additional information and assistance to the Enforcement staff by submitting a detailed written narrative that provided a roadmap for the investigative staff early in the investigation that conserved significant Commission staff time and resources.”
Overall, the SEC has awarded approximately $1.2 billion to over 250 whistleblowers since issuing its first award in 2012. The success of the program has been consistently heralded by agency officials over the past decade. At National Whistleblower Day 2021, SEC Chair Gary Gensler stated that the agency’s whistleblower program “helps us be better cops on the beat, execute our mission, and protect investors from misconduct.”
One issue that has hindered the otherwise successful program, however, are delays in the issuance of whistleblower awards. On March 31, Senators Chuck Grassley (R-IA) and Elizabeth Warren (D-MA) introduced the SEC Whistleblower Reform Act of 2022 in order to further strengthen the highly successful program by ensuring that award claims are processed by the agency in a more timely manner. The bill also bolsters the program’s anti-retaliation protections.
“This law is urgently needed,” said leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Whistleblowers who have been fired often have to wait over four years for any compensation. This amendment closes that painful loophole.”
Read:
Order Determining Whistleblower Award Claims
Bipartisan SEC Whistleblower Reform Act Introduced
More SEC Whistleblower News on WNN
