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SEC Whistleblower Awards Top $42 Million in One Week

In one week’s time, the U.S. Securities and Exchange Commission (SEC) doled out more than $42.35 million in awards to whistleblowers whose tips of securities violations helped the agency make several enforcement actions.

This latest round of awards, the most recent of which was announced on Nov. 5, comes just two weeks after the SEC announced its all-time record payout of $114 million to a single whistleblower. The payout and others also fell within the first five weeks of fiscal year 2021, putting it on track already to become a record year in enforcement actions and awards.

$10 million award

On Oct. 29, the SEC announced an award of more than $10 million to a whistleblower who supplied information that triggered an investigation. The informant also provided substantial, ongoing assistance to SEC staff throughout the investigation, the agency said in its announcement. According to the SEC, “the whistleblower provided key evidence, helped decipher communications and distilled complex issues.”

“After reporting internally and receiving no satisfactory response, the whistleblower alerted the agency to the securities violation and played a critical role during the investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Today’s award demonstrates the significant contributions that whistleblowers can make to substantially assist investigations and help the Commission save time and resources.”

$28 million award

The SEC announced on Nov. 3 that it awarded a whistleblower more than $28 million. Commissioner Norberg said that the whistleblower in this case reported the violations internally, which prompted the company to open an internal investigation.

The informant “saved the staff time and resources by providing testimony and identifying a key witness,” the agency said.

The SEC protects the identity of all its whistleblowers and never discloses information about a case that could reveal the individual or individuals who led the agency to an enforcement action.

$3.6 million and $750,000 to two whistleblowers

The SEC announced on Nov. 5 that it awarded two whistleblowers in separate cases a total of more than $4.3 million.

The informant who received a $3.6 million award provided the SEC with information about misconduct that was occurring overseas. According to the agency, the whistleblower “provided substantial and ongoing assistance to enforcement staff, which included traveling to another country at the whistleblower’s own expense to meet with staff in person and providing extensive supporting documentation.”

In the second case, the agency awarded $750,000 to an informant who tipped off the SEC to ongoing securities fraud. The whistleblower assisted SEC staff “by meeting with them in person and explaining the likely mechanics of the fraudulent scheme,” the agency said.

“In the past month alone, the Commission has awarded four whistleblowers over $150 million for their important contributions to the Commission’s efforts to detect wrongdoing and protect investors and the marketplace,” Commissioner Norberg said. “I hope our recent awards will continue to incentivize whistleblowers to come forward to report potential fraud or other wrongdoing.”

Awards to date

The SEC has doled out about $719 million to 112 whistleblowers since its whistleblower program was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The program issued its first whistleblower award in 2012.

All whistleblower awards are paid out of an investor protection fund that is entirely financed by sanctions violators pay to the SEC.

Individuals who provide the SEC with original, timely, and credible information that results in a successful enforcement action can collect an award of 10% to 30% of the money collected when the monetary sanctions exceed $1 million.

Whistleblower litigation

If you have any questions about whether you qualify as a whistleblower, contact one of the lawyers on our firm’s Whistleblower Litigation Team for a free and confidential evaluation of your claim. Beasley Allen lawyers Larry GolstonLance GouldPaul Evans, Leon HamptonTyner Helms and Lauren Miles are working in this area of law known as qui tam cases. A lawyer on the team will be glad to discuss the potential claim with you either in person or by phone.

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