On November 3, the U.S. Securities and Exchange Commission (SEC) announced a whistleblower award of over $28 million. The award continues a record-setting pace for the SEC Whistleblower Program to start the 2021 fiscal year.
The whistleblower provided significant information to the SEC which led to a successful enforcement action. Additionally, the whistleblower reported the misconduct internally which prompted the company to launch an internal investigation which, in turn, saved the SEC time and resources in its investigation.
“In the past month alone, the Commission has awarded four whistleblowers over $150 million for their important contributions to the Commission’s efforts to detect wrongdoing and protect investors and the marketplace,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “I hope our recent awards will continue to incentivize whistleblowers to come forward to report potential fraud or other wrongdoing.”
Qualified SEC whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government. Whistleblower award payments are made out of a fund entirely financed through monetary sanctions paid to the SEC by securities law violators.
On October 29, the SEC issued a $10 million whistleblower award and on October 22, the SEC issued a $114 million whistleblower award – the largest in SEC history. In the 2020 fiscal year, which ended on September 30, the SEC issued whistleblower awards totaling approximately $175 million to 39 individuals, both greater than any other year in the program’s history. Since issuing its first award in 2012, the SEC has awarded approximately $715 million to 110 individuals.
In a recent press release, SEC Chairman Jay Clayton said “whistleblowers make important contributions to the enforcement of securities laws, and we are committed to getting more money to whistleblowers as quickly and as efficiently as possible.”
In addition to monetary awards, the SEC Whistleblower Program provides anti-retaliation protections to corporate whistleblowers. These protections include confidentiality. Thus, the SEC does not disclose any information that may reveal a whistleblower’s identity.