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SEC Awards More than $40 Million to Four Whistleblowers

On January 21, the U.S. Securities and Exchange Commission (SEC) issued three separate whistleblower award orders granting over $40 million to four whistleblowers. Each whistleblower voluntarily provided the agency with original information that led to a successful enforcement action.

“Credible tips of securities laws violations are a valuable component of the Commission’s enforcement program,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “The critical information provided by these whistleblowers aided the Commission’s investigations and helped the Commission bring these successful enforcement actions.”

Through the SEC Whistleblower Program, qualified whistleblowers are entitled to a monetary award of 10-30% of the sanctions collected in connection with their disclosure in cases where the sanctions exceed $1 million.

In the first award order, the SEC awarded approximately $37 million to a pair of joint whistleblowers whose information and assistance led to a successful SEC action and a successful related action by another agency. Under the related action provisions of the Dodd-Frank Act, the SEC pays awards for sanctions collected by other agencies when those agencies’ enforcement actions utilize information provided to the SEC by a whistleblower. According to the award order, the joint whistleblowers “provided Enforcement staff with key evidence that significantly contributed to the staff’s investigation and the Commission’s charges” and “helped the staff understand the evidence which also led the staff to identify additional valuable information that contributed to the Commission’s charges.”

In the second award order, the SEC awarded $1.8 million to a whistleblower whose disclosure contained important, new information which prompted the agency to open an investigation into the alleged misconduct. The award order further notes that the whistleblower “provided substantial, ongoing assistance, including voluntary interviews and additional information and documents,” “quickly reported internally the misconduct in an effort to remedy it,” and “suffered hardships as a result of reporting.”

In the third award order, the SEC awarded approximately $1.5 million to a whistleblower who provided the SEC with new information that helped the agency formulate their investigative strategy. The award order further notes that the whistleblower “provided substantial and ongoing assistance to the Commission staff by helping the Commission staff understand the issues, which saved significant Commission staff time and resources.”

The award orders follow several other whistleblower awards issued by the SEC in January 2022. On January 6, the SEC awarded over $13 million to a whistleblower. On January 10, the SEC issued two whistleblower awards totaling more than $4 million. On January 11, the SEC issued four separate whistleblower awards.

Overall, the SEC has awarded approximately $1.2 billion to 245 whistleblowers since issuing its first award in 2012. In October 2020, the agency issued a record-setting $114 million award.

Geoff Schweller also contributed to this article.

Copyright Kohn, Kohn & Colapinto, LLP 2022. All Rights Reserved.National Law Review, Volume XII, Number 21
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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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