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Securities Fraud Whistleblowers Rewarded $37 Million for Providing Key Evidence in SEC Investigation

The Securities and Exchange Commission (SEC) announced a whistleblower award of approximately $37 million to two joint whistleblowers who provided key evidence that contributed to the success of the SEC’s enforcement action. The whistleblowers also provided ongoing assistance and helped the staff identify additional information that advanced the investigation.

SEC Whistleblower Program

The SEC Whistleblower Program pays awards to eligible whistleblowers who voluntarily provide the SEC with original information about securities law violations that leads to an enforcement action with monetary sanctions in excess of $1 million. A whistleblower may receive an award of between 10% and 30% of the monetary sanctions collected in the successful SEC enforcement action. Additionally, if a whistleblower’s information leads to a successful related action, they may receive an award of between 10% and 30% of any collections in the related action.

Since the inception of the SEC Whistleblower Program, the SEC has awarded approximately $1.2 billion to whistleblowers. The largest SEC whistleblower awards to date are $114 million, $110 million, and $50 million. The rules of the program permit whistleblowers to submit tips anonymously to the SEC if represented by an attorney.

SEC Order Highlights the Key Considerations in Issuing the $37 Million Award

In reaching the determination to award the whistleblowers $37 million, the SEC “considered that [the whistleblowers] provided Enforcement staff with key evidence that significantly contributed to the staff’s investigation and the Commission’s charges. [The whistleblowers] helped the staff understand the evidence which also led the staff to identify additional valuable information that contributed to the Commission’s charges. [The whistleblowers] also provided ongoing assistance as the staff’s investigation progressed.”

The determination also highlights how the whistleblowers provided original information that led to a successful related action. Specifically, the order states: “The Commission may pay an award based on amounts collected in a related action that is based on the same original information that the whistleblower voluntarily provided to the Commission and that led the Commission to obtain monetary sanctions totaling more than $1 million. Here, the Commission finds that the [whistleblowers provided information that led to a] ‘related action’ within the meaning of Exchange Act Rules 21F-3(b) and 21F-4(d)(3).”

© 2022 Zuckerman LawNational Law Review, Volume XII, Number 24
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About this Author

Jason Zuckerman, Whistleblower Litigation Attorney, Washington DC  Law Firm
Principal

Described by the National Law Journal as a “leading whistleblower attorney,” Jason Zuckerman litigates whistleblower retaliation, whistleblower rewards, wrongful discharge, and other employment-related claims. His practice focuses on representing senior executives and senior professionals in high-stakes...

(202) 262-8959
Matthew Stock, CPA, Auditor, Zuckerman Law Firm
Certified Public Accountant

Matthew Stock is the Director of the Whistleblower Rewards Practice at Zuckerman Law. He is an attorney, Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. Mr. Stock has audited a broad range of industries, both domestically and internationally, including large public companies and financial institutions. As an auditor, Mr. Stock developed an expertise in financial statement analysis and fraud recognition.

At Zuckerman Law, Mr. Stock leverages his experience as an attorney, CPA, CFE and external auditor to...

202-930-5901
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