On December 22, the U.S. Securities and Exchange Commission (SEC) awarded $28 million in total to seven whistleblowers: $13 million to an individual whistleblower, $13 million to four joint whistleblowers, and $2 million to two joint whistleblowers.
“These whistleblowers provided valuable information and substantial assistance that played a critical role in the SEC returning millions of dollars to harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.
The SEC Whistleblower Program offers monetary awards to qualified whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action. Awards are for 10-30% of the funds collected in the enforcement action and the SEC weighs a number of factors in determining the exact percentage to award a whistleblower.
According to the SEC’s award order, the whistleblowers who received the $13 million awards made disclosures which “provided Enforcement staff with detailed and highly significant information early in the investigation that advanced the staff’s investigation, saved considerable Commission time and resources, bore a close nexus to the charges brought by the Commission in the Covered Action, and resulted in millions of dollars being returned to harmed investors.”
These whistleblowers also “provided ongoing assistance by, among other things, participating in voluntary interviews, providing supporting documents to the staff, and identifying key witnesses that were critical to the investigation.”
The whistleblowers who received the $2 million award by contrast “provided information late in the investigation after significant progress had already been made by staff and much of their information was already known to the staff,” according to the award order.
The SEC Whistleblower Program had a record setting year in the 2023 Fiscal Year. The program issued nearly $600 million in whistleblower awards, the most ever in a fiscal year, including a $279 million award, the single largest award in program history. The whistleblower program also received a record 18,000 whistleblower tips over the course of the fiscal year.
“Year after year, the SEC Whistleblower Program continues to build on its immense success,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “The information and assistance provided by whistleblowers play an integral role in the Commission’s enforcement results.”
On March 15, Senators Chuck Grassley (R-IA) and Elizabeth Warren (D-MA) introduced the SEC Whistleblower Reform Act of 2023 in order to further strengthen the highly successful SEC Whistleblower Program. The bill bolsters the Dodd-Frank Act’s anti-retaliation protections and ensures that the agency processes award claims in a more timely manner.
According to Allison Herren Lee, former SEC Commissioner and currently Of Counsel at KKC, the SEC Whistleblower Reform Act of 2023 “will help ensure that the SEC Whistleblower Program remains an indispensable tool in the Commission’s efforts to police wrongdoing and protect investors.”
National Whistleblower Center (NWC) is calling for the immediate passage of the SEC Whistleblower Reform Act. NWC has set up Action Alert calling on whistleblower supports to join them in urging Congress to pass the bill and protect internal corporate whistleblowers.
Join NWC in Taking Action:
Protect Internal Corporate Whistleblowers
Further Reading:
SEC Awards More Than $28 Million to Seven Whistleblowers
SEC Whistleblower Program had a Record-Setting 2023 Fiscal Year