January 23, 2022

Volume XII, Number 23

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January 21, 2022

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January 20, 2022

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SEC Awards $400,000 to Whistleblower Culpable In Fraudulent Scheme

On November 23, 2021, the SEC issued an award of $400,000 to a whistleblower who voluntarily provided the SEC with original information that assisted the agency in bringing a successful enforcement action that resulted in the termination of an ongoing Ponzi-like scheme.

This award is notable in that the claimant received an award even though they were found to be partially culpable in the fraudulent scheme.  The order granting the award noted that “[w]hile Claimant was not charged in the matter, the record reflects that Claimant became aware of” the scheme, but also recognized several mitigating factors, including that the claimant “was unaware of certain fraudulent aspects of the investment scheme, and took some steps to help remediate the harm.”  The SEC concluded that the award “strikes the appropriate balance between Claimant’s significant contributions to the success of the Covered Action and Claimant’s level of culpability.”

© 2022 Proskauer Rose LLP. National Law Review, Volume XI, Number 337
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About this Author

Steven J Pearlman, Labor Employment Law Firm, Proskauer Law firm
Partner

Steven Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm's Whistleblowing & Retaliation Group, resident in the Chicago office. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination and harassment, wage-and-hour laws and breaches of restrictive covenants (e.g., non-competition agreements). He has successfully tried cases to verdict before judges and juries in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S....

312-962-3545
Pinny Goldberg Labor and Employment Lawyer Proskauer Rose Law Firm
Associate

Pinny Goldberg is an associate in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims. 

In...

212.969.3074
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