Securities Fraud Whistleblowers Rewarded $37 Million
The Securities and Exchange Commission (SEC) announced a whistleblower award of approximately $37 million to two joint whistleblowers who provided key evidence that contributed to the success of the SEC’s enforcement action. The whistleblowers also provided ongoing assistance and helped the staff identify additional information that advanced the investigation.
SEC Whistleblower Program
The SEC Whistleblower Program pays awards to eligible whistleblowers who voluntarily provide the SEC with original information about securities law violations that leads to an enforcement action with monetary sanctions in excess of $1 million. A whistleblower may receive an award of between 10% and 30% of the monetary sanctions collected in the successful SEC enforcement action. Additionally, if a whistleblower’s information leads to a successful related action, they may receive an award of between 10% and 30% of any collections in the related action.
Since the inception of the SEC Whistleblower Program, the SEC has awarded approximately $1.2 billion to whistleblowers. The largest SEC whistleblower awards to date are $114 million, $110 million, and $50 million. The rules of the program permit whistleblowers to submit tips anonymously to the SEC if represented by an attorney.
SEC Order Highlights the Key Considerations in Issuing the $37 Million Award
In reaching the determination to award the whistleblowers $37 million, the SEC “considered that [the whistleblowers] provided Enforcement staff with key evidence that significantly contributed to the staff’s investigation and the Commission’s charges. [The whistleblowers] helped the staff understand the evidence which also led the staff to identify additional valuable information that contributed to the Commission’s charges. [The whistleblowers] also provided ongoing assistance as the staff’s investigation progressed.”
The determination also highlights how the whistleblowers provided original information that led to a successful related action. Specifically, the order states: “The Commission may pay an award based on amounts collected in a related action that is based on the same original information that the whistleblower voluntarily provided to the Commission and that led the Commission to obtain monetary sanctions totaling more than $1 million. Here, the Commission finds that the [whistleblowers provided information that led to a] ‘related action’ within the meaning of Exchange Act Rules 21F-3(b) and 21F-4(d)(3).”
SEC Whistleblower Attorneys
In conjunction with our courageous clients, our SEC whistleblower lawyers have helped the SEC halt multi-million dollar investment schemes, expose violations at large publicly traded companies, and return funds to defrauded investors.
Recently, U.S. News and Best Lawyers® named Zuckerman Law a Tier 1 firm in the Washington DC metropolitan area. Click below to hear SEC whistleblower attorney Matthew Stock’s tips for SEC whistleblowers:
