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SEC issues whistleblower awards totaling over $5.2 million

Securities SEC Whistleblower Enforcement

Securities

On December 22, the SEC announced a more than $1.6 million award to a whistleblower whose critical information and assistance led to a successful SEC enforcement action. According to the redacted order, the whistleblower provided ongoing assistance to SEC staff as well as “original information that solidified their suspicions about certain defendants’ fraudulent” actions despite concerns about personal safety.

Earlier, on December 18, the SEC announced whistleblower awards totaling over $3.6 million in three separate enforcement actions. According to the first redacted order, the SEC awarded a whistleblower more than $1.8 million for voluntarily providing significant information and substantial assistance to SEC staff in a successful enforcement action. The whistleblower provided information—which “revealed a hard to detect fraudulent scheme” leading to the return of millions of dollars to harmed investors—and also “took immediate steps to mitigate the harm to investors and suffered hardships for doing so.”

In the second redacted order, the SEC awarded a whistleblower over $1.2 million for providing information leading to a successful enforcement action, although the Commission noted that the award amount was impacted after it determined the whistleblower “was culpable for actively participating in and financially benefiting from the fraudulent scheme” and “unreasonably delayed reporting” the scheme to the SEC.

In the third redacted order, a whistleblower was awarded more than $500,000 for providing significant information and ongoing assistance to SEC staff in a successful enforcement action. However, the SEC rejected the whistleblower’s claim that a higher award amount was warranted after it determined, among other things, that the whistleblower “unreasonably delayed reporting the misconduct for several years while investors were being harmed.”

The SEC has now paid approximately $736 million to 128 individuals since the inception of the program.

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