SEC Whistleblower Office Posts Eight New Notices of Covered Actions

SEC Whistleblower

On December 31, the U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower posted eight new Notices of Covered Actions (NCAs). Each NCA relates to a specific SEC enforcement action and signals that individuals may now submit whistleblower award claims for these actions. Whistleblowers have until March 31, 2021 to apply for an award for these newly posted NCAs by submitting a completed Form WB-APP to the SEC Office of the Whistleblower.

The eight NCAs relate to a wide variety of SEC enforcement actions. One Notice covers fraud charges against a Denver-based group of companies that allegedly conducted a $55 million Ponzi scheme. Another Notice refers to a case in which the SEC charged Kik Interactive Inc. for conducting an illegal $100 million securities offering of digital tokens. A third Notice covers a case in which two former Wells Fargo executives are to pay the SEC $2.5 million for allegedly misleading investors about a key performance metric. By posting an NCA, the SEC is not making any determination that the relevant case was aided by a whistleblower tip. Rather, the SEC posts an NCA for any enforcement action that results in monetary sanctions exceeding $1 million.

Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the SEC original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government. According to the SEC, “all payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.”

In the 2020 fiscal year, the SEC Whistleblower Program awarded approximately $175 million to 39 individuals — both the highest dollar amount and the highest number of individuals awarded in a single fiscal year. However, the SEC is currently on pace to shatter those records in the 2021 fiscal year. Since the fiscal year began on October 1, 2020, the SEC has awarded approximately $174 million to 22 individuals. Included in that total is the record $114 million whistleblower award issued on October 22.

In addition to monetary awards, the SEC Whistleblower Program provides anti-retaliation protections to whistleblowers, including confidentiality. Thus, the SEC does not disclose any information that may reveal a whistleblower’s identity.


The SEC’s Notices of Covered Actions

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