From October 21 through 24, the U.S. Securities and Exchange Commission (SEC) issued whistleblower awards totaling over $4.6 million to four individual whistleblowers. The awards, which stem from three separate enforcement actions, were each granted to an individual who voluntarily provided the SEC with original information that led to a successful enforcement action.
On October 21, the SEC issued a $2.7 million award to a whistleblower who “provided important, new information, including in the form of documents and analysis, that assisted the Commission’s investigation.” According to the award order, the whistleblower also “participated in multiple voluntary interviews with Commission staff” and “some of the underlying findings in the Covered Action were based on [the whistleblower’s] information.”
On October 24, the SEC released two award orders. The first order granted a $1 million award and a $500,000 award to whistleblowers who provided information which contributed to the same enforcement action.
In the award order, the SEC explains the discrepancy in the amount awarded to each whistleblower: “while Claimant 2 provided significant information, Claimant 2’s information was less significant than Claimant 1’s information. In particular, Claimant 1 brought the operation of the scheme to the Commission staff’s attention and assisted in the staff’s understanding of the scheme as a whole.” The SEC also notes that it factored in the second whistleblower’s “unreasonable reporting delay to the Commission for over 30 months.”
The second award order issued on October 24 was for a $400,000 award granted to a whistleblower, an investor who “expeditiously reported information about an ongoing offering fraud to the Commission.” The whistleblower’s disclosure prompted the opening of an investigation and thereafter the whistleblower provided additional assistance to the SEC.
In granting the whistleblower award, the SEC used its discretionary authority to waive a TCR filing requirement because it “determined that it would be in the public interest and consistent with the protection of investors,” to do so. The SEC explains that while the whistleblower did make their disclosure by filing a Form TCR, they failed to properly sign and submit the document as required. On October 14, the SEC waived the TCR filing requirement and awarded over $1 million to two whistleblowers.
Through the SEC Whistleblower Program, qualified whistleblowers are entitled to monetary awards of 10-30% of the funds collected by the government in the relevant enforcement action. The SEC has awarded over $1.3 billion to over 280 whistleblowers.
Geoff Schweller also contributed to this article.