June 27, 2022

Volume XII, Number 178

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June 27, 2022

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June 24, 2022

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SEC Awards $1.5 Million to Whistleblower for Independent Analysis

On March 17, the U.S. Securities and Exchange Commission (SEC) issued a whistleblower award of approximately $1.5 million to an individual who provided information based upon independent knowledge and analysis which contributed to the success of an SEC enforcement action and a related action by another agency. The award is based upon the current collections in the relevant enforcement actions and may grow if more monies are collected.

Qualified SEC whistleblowers, individuals who voluntarily provide original information that leads to a successful SEC enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government. Under the related-action provisions of the Dodd-Frank Act, the SEC pays whistleblower awards when other government agencies carry out enforcement actions based on information originally provided to the SEC. Related-action awards are also for 10-30% of the funds recouped in the actions.

According to the award order, the whistleblower provided the SEC with information based upon their “independent knowledge and independent analysis that alerted Enforcement staff to potential violations of the securities laws.” The whistleblower’s information in part led the SEC to open an investigation that resulted in an enforcement action. In the award order the SEC also notes that the whistleblower “provided ongoing assistance during the litigation phase of the Covered Action.”

The whistleblower’s information and assistance also contributed to the success of a related enforcement action by another agency.

In February 2022, the SEC proposed an amendment to its related action rules. The proposed amendment allows the SEC to pay related action awards for enforcement actions taken by other entities even when those agencies have their own whistleblower reward programs. According to SEC Chair Gary Gensler, this rule “is designed to ensure that a whistleblower is not disadvantaged by another whistleblower program that would not give them as high an award as the SEC would offer.”

Since issuing its first award in 2012, the has awarded approximately $1.2 billion to about 250 individuals.

Geoff Schweller also contributed to this article.

Copyright Kohn, Kohn & Colapinto, LLP 2022. All Rights Reserved.National Law Review, Volume XII, Number 76
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About this Author

Mary Jane Wilmoth Whistleblower Attorney Kohn Kohn & Colapinto Law Firm
Managing Partner

Mary Jane Wilmoth is the firm’s managing partner. She litigated cases involving whistleblower protection for environmental and nuclear industry whistleblowers, and Qui Tam/False Claims whistleblowers. Ms. Wilmoth joined the firm in 1992 and worked on cases and hearings that involved complex nuclear and environmental regulations. In her efforts to uphold such safeguards in the American workplace, she has helped to strengthen whistleblower rights in licensing and...

202-342-6980
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