On October 29, a whistleblower received more than $2 million for their disclosures which led to successful enforcement actions by both the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ).
According to the award order, the whistleblower, or “Claimant,” previously received an award in connection to the SEC Covered Action. The new $2 million award is based upon a percentage of the sanctions that have been or will be collected in the DOJ’s Related Action, though the notice does not divulge the value of the percentage.
“The record demonstrates that Claimant voluntarily provided the same original information to the DOJ and the Commission, and that information led to the successful enforcement of the Related Action,” the award order states.
Additionally, the award order reports that the whistleblower “provided information that prompted the opening of the DOJ and SEC investigations” and “provided extensive, ongoing assistance in the investigations.”
The whistleblower qualified for this award due to amendments to the SEC’s whistleblower program passed in September of 2020. The amendments clarified “the types of actions that may be considered ‘related’ under the whistleblower rules” — the amendments applied to this whistleblower’s case and awards because their disclosures led to enforcement actions at two different agencies.
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 Whistleblower Program also offers anti-retaliation protections to whistleblowers. One such protection is confidentiality; thus, the SEC does not disclose any identifying information about award recipients.
“The SEC’s whistleblower rule amendments make clear that non-prosecution and deferred prosecution agreements entered into by the DOJ are related actions upon which whistleblowers may receive awards,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, in the press release announcing the award. “Today’s award demonstrates the SEC’s commitment to award whistleblowers not only for their contributions to a successful SEC enforcement action but also for their contributions to qualifying related actions,” she continued.
According to the press release, since issuing its first whistleblower award in 2012, “[t]he SEC has awarded approximately $1.1 billion to 224 individuals.” Whistleblower awards are paid out of “an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators,” the press release states.