SEC Announces Record-Breaking Whistleblower Award of $114 Million
Today, the Securities and Exchange Commission (SEC) announced a record-setting $114 million whistleblower award. The SEC case resulted in an award of approximately $52 million, while another $62 million came from the related actions of a separate agency.
“This is a great step forward,” said whistleblower attorney Stephen M. Kohn, partner at Kohn, Kohn & Colapinto. “It is proof that the SEC understands the importance of paying large rewards to incentivize whistleblowers to step forward and deter future wrongdoing,”
According to the SEC award order, the whistleblower “suffered serious personal and professional hardships as a result of their activities.” The SEC whistleblower’s tip led the Commission to open the investigation.
“Academic studies confirm that paying large rewards has a major deterrent effect,” Kohn continued. “The fraudsters fear that large economic bounties will result in their detection.”
As set forth under the Dodd Frank Act, the SEC Whistleblower Program rewards those who provide the Commission with original information of frauds resulting in monetary sanctions of $1 million or more. Whistleblowers can remain anonymous and confidential when filing award claims with the SEC.
“Today’s milestone award is a testament to the Commission’s commitment to award whistleblowers who provide the agency with high-quality information,” said SEC Chairman Jay Clayton. “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.”
The SEC Whistleblower Program has now issued over $675 million to 108 whistleblowers since 2012. This record-setting award is over two times more than the previous largest highest payout, which was an award of $50 million given to a whistleblower in June 2020.
