A whistleblower who provided the U.S. Securities and Exchange Commission (SEC) “significant information” that helped regulators blow open a case of fraud received an award of $3.8 million.

global stock exchange 375x210 Whistleblower receives $3.8 million SEC payout for reporting fraudThe SEC’s Office of the Whistleblower said in an announcement last week that the unnamed informant’s insider tips “helped the SEC disrupt an ongoing fraud scheme” and prompted an enforcement action that in the end returned “millions of dollars to harmed investors.”

“Today’s award underscores the paramount role the SEC’s whistleblower program plays in safeguarding the Main Street investor,” the SEC’s release states.

Jane Norberg, Chief of the SEC’s Whistleblower office, said that the commission has ordered more than $2.5 billion in financial remedies since the whistleblower office was formed nearly 10 years ago under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The sanctions included “more than $1.4 billion in disgorgement and prejudgment interest, of which almost $750 million has been returned or is scheduled to be returned to harmed investors,” Commissioner Norberg said.

To date, the SEC has awarded approximately $505 million to 87 informants since issuing its first award in 2012, including 20 individual awards in the last 10 months totaling nearly $119 million.

In June, the SEC announced a record payout of nearly $50 million to an individual who provided “detailed, firsthand observations of misconduct” by the Bank of New York Mellon, which resulted “in a successful enforcement action that returned a significant amount of money to harmed investors.”

Two other whistleblower cases resulted in significant awards in June. In one case, an informant who first reported a problem internally in an effort to remedy the misconduct before contacting the SEC received an award of about $700,000. Another informant who exposed the “perpetrator of a fraudulent securities offering” received a payout of nearly $125,000.

SEC awards range from 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 EvansLeslie PesciaLeon 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.

Additional source: SEC Whistleblower Award Proceeding

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