The U.S. Securities and Exchange Commission (SEC) announced it has awarded three whistleblowers who provided information and tips about securities violations and other assistance to federal regulators, resulting in successful enforcement actions.
In one case, the SEC awarded a whistleblower $1.25 million for “significant information” that prompted an investigation and brought about “an enforcement action that resulted in the return of millions of dollars to harmed investors,” the agency said in an Aug. 31 announcement.
“The whistleblower’s expeditious reporting alerted the agency to previously unknown securities violations,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “This whistleblower’s vigilance and prompt reporting helped the agency move quickly to protect investors.”
The following day, the SEC announced it had awarded $2.5 million to a pair of whistleblowers who didn’t offer inside information but worked jointly in providing regulators with a “highly probative independent analysis of a public company’s filings.” That information prompted an SEC investigation that determined the company was violating federal securities laws.
“Detailed analysis by outsiders of companies can have a significant impact on the enforcement of the federal securities laws,” said Jane Norberg, Chief of the Office of the Whistleblower. She added that the award demonstrated the agency’s “commitment to awarding individuals who provide high-quality independent analysis that leads to successful enforcement actions.”
The SEC has doled out about $510 million to 92 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.
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 Golston, Lance Gould, Paul Evans, Leslie Pescia, 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 either in person or by phone.