The U.S. Securities and Exchange Commission (SEC) announced Thursday that it awarded more than $114 million to a single whistleblower. In its 10-year history, the agency has never paid an award this large.
About $52 million of the award was for their help with the SEC case. The other $62 million was for helping another agency with a related action. The combined award is more than twice the previous record payout of $50 million. The commission paid that award in June 2020.
“Today’s milestone award is a testament to the Commission’s commitment to award whistleblowers who provide the agency with high-quality information. Whistleblowers make important contributions to the enforcement of securities laws and we are committed to getting more money to whistleblowers as quickly and as efficiently as possible.”
— SEC Chairman Jay Clayton, Oct. 22
Jane Norberg, head of the SEC’s Office of the Whistleblower, called the informant’s actions “extraordinary.”
“After repeatedly reporting concerns internally, and despite personal and professional hardships, the whistleblower alerted the SEC and the other agency of the wrongdoing and provided substantial, ongoing assistance that proved critical to the success of the actions.”
How do whistleblower awards work?
The SEC protects whistleblowers and does not disclose details about a case that could reveal who they are.
The Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 established the SEC’s whistleblower program. The program was created in response to the fraud driven financial crisis of 2008 and 2009, which nearly thrust the U.S. into a depression. The agency paid its first whistleblower award in 2012. Since then, it has awarded 108 people a combined $676 million.
Awards can range from 10% to 30% of the money collected when the total sanctions top $1 million. The SEC pays whistleblower awards from an investor protection fund financed entirely through penalties paid by investment law violators.
If you have questions about whether you qualify as a whistleblower, contact our firm’s Whistleblower Team. You will receive a free and confidential evaluation of your claim. Lawyers Larry Golston, Lance Gould, Paul Evans, Leon Hampton, Tyner 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.