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SEC monetary sanctions in whistleblower program top $2 million for 2019

Securities SEC Whistleblower Enforcement Fintech Cryptocurrency

Securities

On November 15, the SEC announced it issued its fiscal year 2019 whistleblower program annual report to Congress, which states that since the program’s inception, the SEC has ordered over $2 billion in total monetary sanctions in enforcement actions that resulted from information brought by meritorious whistleblowers. As for FY 2019, the SEC received over 5,200 whistleblower tips, with over 300 tips relating to cryptocurrencies, and awarded approximately $60 million in whistleblower awards to eight individuals. Since the program’s inception, the SEC has awarded approximately $387 million to 67 whistleblowers. The report acknowledges that FY 2019 was an “unusual year” due to the lapse in appropriations, referring to the government shutdown from the end of December 2018 through most of January 2019, and includes a summary of the six actions leading to the eight awards of FY 2019. The report notes that the agency anticipates final rules to be adopted in FY 2020 related to the July 2018 proposed amendments to the whistleblower program (covered by InfoBytes here). The proposed amendments, among other things, address the Supreme Court ruling in Digital Realty Trust, Inc. v. Somers (covered in a Buckley Special Alert) and authorize the SEC to adjust an award’s percentage as appropriate to advance the goals of rewarding and incentivizing whistleblowers.

On the same day, the SEC announced a collective award of over $260,000 to three whistleblowers who submitted a joint tip “alerting the agency to a well-concealed fraud targeting retail investors,” which led to a successful enforcement action. The order does not provide any additional details regarding the whistleblower or the company involved in the enforcement action. With this new action, the SEC has now awarded approximately $387 million to 70 whistleblowers.

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