SEC Awards Two Whistleblower $1 Million Each

On June 27, the U.S. Securities and Exchange Commission (SEC) awarded two whistleblowers $1 million each for their role in a successful enforcement action. Both of the whistleblowers voluntarily provided original information that contributed to the success of the action.

Through the SEC Whistleblower Program, qualified whistleblowers are entitled to monetary awards of 10-30% of the funds collected in the enforcement action their disclosure aided in the success of.

According to the award order, in determining the exact percentage to award the whistleblowers, the SEC “considered that both Claimants 1 and 2 provided information that caused, in part, staff to open the Covered Action investigation, and both Claimants 1 and 2 provided substantial, helpful assistance.”

The award order details the first whistleblower’s (Claimant 1) response to the preliminary determination to award each whistleblower equal amounts. According to the SEC, however, “Claimant 1’s arguments in his/her reconsideration request for a higher award percentage are largely based on speculation and do not support a higher award percentage allocation to Claimant 1.”

The award order specifies that “[t]he record is clear that staff opened the Covered Action investigation based both on information developed from the Other investigation and Claimant 2’s tip, and that both Claimants 1 and 2 provided information that caused, in part, staff to open the Covered Action investigation.”

The SEC also clarifies that “the record is clear that Claimant 2 provided significant original information, including both independent knowledge and independent analysis, that differed from Claimant 1’s information and that was helpful to the success of the Covered Action.”

Earlier in 2023, the SEC issued the largest whistleblower award in agency history. A $279 million award was granted on May 5 to an individual who provided information and assistance that led to a successful SEC enforcement action and related actions by other agencies.

Since 2011, the SEC Whistleblower Program has awarded over $1.5 billion to over 300 whistleblowers. SEC whistleblower tips have resulted in over $6.3 billion in total monetary sanctions, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.