SEC Whistleblower

Today, the U.S. Securities and Exchange Commission (SEC) awarded approximately $36 million to a whistleblower who provided the agency with information and assistance that helped lead to a successful enforcement action. The whistleblower’s disclosure also contributed to the success of enforcement actions by another federal agency.

The whistleblower “provided crucial information on an illegal scheme to the SEC’s and the other agency’s staffs,” according to the SEC. The award order notes that the whistleblower “met with Enforcement staff on multiple occasions, provided information that allowed Enforcement and Other Agency staff to identify and request key documents, and provided crucial information regarding the illegal scheme.” In the award order, the SEC also mentions the whistleblower’s “unreasonable delay” in reporting the violations as a factor weighed in determining the exact award percentage.

Qualified SEC whistleblowers are entitled to awards of 10-30% of the funds collected in the enforcement action which their information assisted in. Furthermore, when other federal agencies carry out successful enforcement actions based on a whistleblower’s information, the SEC will pay related action awards of 10-30% of the sanctions in those actions. The exact percentage of an award is determined by the SEC based on a number of factors, including timeliness of the disclosure and the degree of further assistance provided by the whistleblower.

“Today’s whistleblower brought valuable new information to the attention of the SEC and to another federal agency, greatly assisting ongoing investigations,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower. “Whistleblowers can act as a springboard for an investigation or, like here, they can propel forward an already existing investigation.”

Overall, the SEC has awarded approximately $1.1 billion to 214 individuals through its whistleblower program. In addition to awards, the program offers anti-retaliation protections to whistleblowers. Before contacting the SEC, a potential whistleblower should consult with an experienced SEC whistleblower attorney to ensure they are fully protected and qualify for the largest award possible.

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