SEC Awards More than $20 Million to Whistleblower

On December 12, the U.S. Securities and Exchange Commission (SEC) issued a $20 million whistleblower award to an individual who voluntarily provided information and assistance that contributed to the success of an enforcement action. According to the SEC, the whistleblower “provided new information, met with Enforcement Division staff multiple times, and remained cooperative throughout the investigation.”

Qualified SEC whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to awards of 10-30% of the funds collected by the SEC in the enforcement action.

“Whistleblowers may lead to the success of an enforcement matter by providing information that causes an investigation or examination to open or that meaningfully advances an existing investigation,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.

In the award order, the SEC notes that prior to the whistleblower’s disclosure “Enforcement staff had previously received a detailed referral from the Division of Examinations and had been investigating the conduct for more than a year.” Thus, “much of the information Claimant provided was already known to the Enforcement staff.”

However, the award order further states that the whistleblower “met with Enforcement staff multiple times and remained cooperative throughout the investigation.”

This is the second recent $20 million whistleblower award issued by the SEC. On November 28, the SEC issued a $20 million whistleblower award to an individual whose disclosure contained “new and critical information that led to the success of an enforcement action,” according to the SEC.

According to the SEC Whistleblower Office’s Annual Report to Congress for the 2022 Fiscal Year, since the SEC Whistleblower Program was established in 2010, “[e]nforcement actions brought using information from meritorious whistleblowers have resulted in orders for more than $6.3 billion in total monetary sanctions, including more than $4.0 billion in disgorgement of ill-gotten gains and interest, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.”

Individuals considering blowing the whistle to the SEC should first consult an experienced SEC whistleblower attorney in order to ensure they are fully protected and qualify for the largest possible award.