SEC Awards Over $1.5 Million to Joint Whistleblowers
On October 25, the U.S. Securities and Exchange Commission (SEC) issued a joint whistleblower award of more than $1.5 million to two individuals who voluntarily provided the SEC with original information that led to successful enforcement actions.
Through the SEC Whistleblower Program, whistleblowers can qualify for monetary awards ranging from 10-30% of the funds collected by the government in actions associated with their disclosure. Individuals qualify for awards when they voluntarily provide original, credible, and timely information that leads to an enforcement action in which the government collects over $1 million. The SEC also protects the confidentiality of whistleblowers and thus does not disclose any identifying information about award recipients.
According to the award order, the two whistleblowers “spoke telephonically with staff after submitting their tips and provided critical information concerning the breadth of the alleged wrongdoing, additional parties involved with the conduct, and the credibility of certain witnesses, which helped expedite the staff’s discovery requests and advance the investigation.”
In this case the whistleblowers submitted a whistleblower award claim jointly. They will each receive 50% of the total award unless they petition the SEC for a different distribution.
The SEC has already issued a number of whistleblower awards since the 2022 fiscal year began on October 1, 2021. The 2021 fiscal year was a record year for the agency’s whistleblower program. In the 2021 fiscal year, the SEC awarded over $500 million to over 100 whistleblowers.
Overall, the SEC has awarded over $1.1 billion to over 200 individual whistleblowers. When the whistleblower program surpassed the $1 billion mark in total awards, SEC Chair Gary Gensler stated that the milestone “underscores the important role that whistleblowers play in helping the SEC detect, investigate, and prosecute potential violations of the securities laws. The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.”
Geoff Schweller alslo contributed to this article.