Three SEC Whistleblowers Receive an $18 Million Award

Outside of the SEC building

Washington DC, USA - October 12, 2018: United States Securities and Exchange Commission SEC architecture closeup with modern building sign and logo with red flags by glass windows

On January 19, the U.S. Securities and Exchange Commission (SEC) announced that three whistleblowers who provided “information and assistance” that “led to a successful enforcement action” will receive $18 million.

Through the SEC Whistleblower Program, the SEC pays monetary awards to individuals who voluntarily disclose information that leads to a successful enforcement action. These awards are for 10-30% of the sanctions collected in the successful action.

According to the award order, three whistleblowers will receive the $18 million award, while one individual’s award claim was denied. One whistleblower accepted the award determination, while the three other applicants “filed timely responses contesting the Preliminary Determinations” made by the Claims Review Staff (CRS). The CRS then “confirmed its original recommendations” after reviewing the individuals’ arguments.

All individuals mentioned in the award order filed their whistleblower claims on time. The CRS’ Preliminary Determinations deemed that three whistleblowers “voluntarily provided original information to the Commission that led to the successful enforcement of the referenced Covered Action.” The CRS denied an award to the fourth individual because they “did not provide original information that ‘led to’ the success of the Covered Action as required under Exchange Act Rule 21F-4(c).” Additionally, the CRS decided that this individual “ is not eligible for the automatic waiver under Exchange Act Rule 21F-9(e) in connection with Claimant 4’s failure to submit information in the form and manner required under Exchange Act Rules 21F-9(a) and (b).”

Some of the claimants who did receive awards submitted written responses to the Preliminary Determinations. Claimants 2 and 3 argued that they should receive higher awards than doled out in the Preliminary Determinations, while Claimant 4 argued that they should receive a whistleblower award.

The award order breaks down how the CRS analyzed each individual’s claims:

In Fiscal Year 2022, the SEC “awarded approximately $229 million in 103 awards, making FY 2022 the Commission’s second highest year in terms of dollar amounts and number of awards,” according to the Whistleblower Office’s Annual Report to Congress.

The report also states that “Enforcement actions brought using information from meritorious whistleblowers have resulted in orders for more than $6.3 billion in total monetary sanctions, including more than $4.0 billion in disgorgement of ill-gotten gains and interest, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.”

Read the SEC press release here. 

Read more SEC whistleblower news on WNN

Exit mobile version