On August 31st, the Securities and Exchange Commission (SEC) announced a whistleblower award of $1.25 million granted to an individual whose reporting prompted the SEC to open an investigation.
According to the SEC order, the anonymous whistleblower’s information led the Commission to return millions of dollars to harmed investors.
“This latest award, which came just days before the SEC was scheduled to vote on proposed rules that could devastate the highly successful whistleblower program, proves how important it is to properly compensate whistleblowers,” said whistleblower attorney Stephen M. Kohn, partner at the qui tam law firm Kohn, Kohn & Colapinto. “Limiting the amount of money whistleblowers can receive from reporting financial crimes will be highly damaging to the integrity of the program.”
Under the Dodd Frank Act, SEC whistleblowers who provide the Commission with original information that leads to sanctions of $1 million or more can become eligible for whistleblower awards ranging from 10 to 30 percent of the monies collected.
Since 2012, the SEC has issued over $507 million in awards to 90 whistleblowers.
The SEC protects the identity of whistleblowers who apply for awards. Anonymous SEC whistleblowers must hire an experienced whistleblower attorney to assist them in filing an award application.
“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, resulting in the return of millions of dollars to harmed investors.”