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SEC Issues More than $54 Million to Two Whistleblowers

On September 6, 2018, the SEC Office of the Whistleblower awarded $39 million to one whistleblower and $15 million to another. The $39 million award is the second-largest award in the history of the program, behind a $50 million award made in March of this year.

The Chief of the SEC Office of the Whistleblower, Jane Norberg, said in a press release that “[w]histleblowers serve as invaluable sources of information, and can propel an investigation forward by helping us overcome obstacles and delays in investigation.” She added, “[t]hese substantial awards send a strong message about the SEC’s commitment to whistleblowers and the value they bring to the agency’s mission.”

According to the Order, the first whistleblower’s award was slightly reduced based on delay in reporting the misconduct. This reduction, however, was smaller than usual because the majority of the time period during which the whistleblower failed to report predated the SEC whistleblower program.

In addition, the second whistleblower provided information in connection with an earlier investigative interview, which the SEC found to be an involuntary submission.  However, because the whistleblower did not know the information at the time of the interview and promptly informed the SEC upon discovery, the SEC granted an award as a limited waiver of the voluntariness requirement.

Also, both whistleblowers’ respective related-action claims were denied. The first was denied because the original information did not lead to a successful agency action in another action.  The second was denied because an additional waiver related to a second agency’s action was not in the public interest. The SEC said allowing whistleblowers to recover funds both under its program and a separate program “for the same action would produce the irrational result of encouraging multiple ‘bites of the apple’ in adjudicating claims for the same action.”

An award for a third claimant was denied, as the information he or she provided did not lead to a successful covered action.

Since its first award in 2012, the SEC has awarded more than $320 million to 57 individuals.

© 2018 Proskauer Rose LLP.

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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
Austin McLeod, employment lawyer, Proskauer
Law Clerk

Austin D. McLeod is a law clerk in the Labor & Employment Department.

Austin assists clients in a range of labor and employment matters. Prior to joining Proskauer, Austin interned at the PGA TOUR and worked as a litigation paralegal at a major financial services company.

During law school, Austin worked as a labor relations law clerk for the National Football League. He also served as a staff editor of the NYU Journal of Intellectual Property and Entertainment Law and President of the Student Lawyer Athletic Program.

+1.212.969.3538