January 25, 2022

Volume XII, Number 25

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January 24, 2022

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SEC Grants $2 Million Related Action Award to Whistleblower Based on 2020 Rule

On October 29, the U.S. Securities and Exchange Commission (SEC) issued a whistleblower award for over $2 million to an individual who provided the agency with original information. The whistleblower’s information was used in a successful enforcement action by the U.S. Department of Justice (DOJ).

Qualified SEC whistleblowers are entitled to monetary awards of 10-30% of the funds recovered by the SEC in actions connected with their disclosure. Furthermore, the SEC pays related action awards when a whistleblower’s information is also used in an enforcement action by another agency. 

According to the SEC, the whistleblower in this case had previously received a whistleblower award for the SEC’s enforcement action connected to their disclosure. The whistleblower became eligible for the related action award based on a 2020 SEC rule amendment clarifying the related action provisions of the Dodd-Frank Act.

“The SEC’s whistleblower rule amendments make clear that non-prosecution and deferred prosecution agreements entered into by the DOJ are related actions upon which whistleblowers may receive awards,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower. “Today’s award demonstrates the SEC’s commitment to award whistleblowers not only for their contributions to a successful SEC enforcement action but also for their contributions to qualifying related actions.”

According to the award order, the whistleblower “provided information that prompted the opening of the DOJ and SEC investigations” and “provided extensive, ongoing assistance in the investigations.”

The 2020 SEC whistleblower rule amendments went into effect on December 7, 2020. On February 23, 2021 the SEC issued its first related action award for a non-prosecution agreement or deferred prosecution agreement by the DOJ. In that case, the SEC awarded more than $9.2 million to a whistleblower.

Since issuing its first award in 2012, the SEC has awarded approximately $1.1 billion to 224 individuals.

Geoff Schweller also contributed to this article. 

Copyright Kohn, Kohn & Colapinto, LLP 2022. All Rights Reserved.National Law Review, Volume XI, Number 302
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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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