Consumer Fraud

SEC Awards Two Whistleblowers More Than $16 Million

SEC Office of the Whistleblower wikipedia image 342x210 SEC Awards Two Whistleblowers More Than $16 MillionTwo whistleblowers will each receive an award of more than $8 million from the Securities and Exchange Commission (SEC) for their role in helping the agency take action against a company’s wrongdoing.

According to the SEC, the first whistleblower alerted the agency’s enforcement staff of specific misconduct that would become the focus of a federal investigation and the cornerstone of the SEC’s subsequent enforcement action.

The second whistleblower also played a key role in providing investigators with additional information and ongoing cooperation throughout the probe. The SEC said that this whistleblower’s help saved a substantial amount of time and SEC resources.

The awards, which the agency announced on Thursday, Nov. 30, were the largest the SEC has given to whistleblowers this year. The latest case has also pushed SEC whistleblower-assisted enforcement actions over the $1 billion threshold.

“Whistleblowers have played a crucial role in the progression of many investigations and the success of enforcement actions since the inception of the whistleblower program,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.

“The value of whistleblowers can be seen in the more than $1 billion in financial remedies ordered against wrongdoers based on actionable information from whistleblowers, including more than $671 million in disgorgement of ill-gotten gains, much of which has been or is scheduled to be returned to harmed investors,” she added.

The SEC’s whistleblower program has awarded more than $175 million to 49 whistleblowers, including this latest enforcement action, since issuing its first award in 2012. All whistleblower awards are made out of an investor-protection fund that is financed entirely through monetary sanctions paid to the SEC by securities law violators. The SEC does not take or withhold any money from harmed investors to pay whistleblower awards.

The SEC’s whistleblower program has some of the strictest protections for whistleblowers. The agency never discloses information about a case that could directly or indirectly reveal a whistleblower’s identity.

The SEC’s whistleblower program has now awarded more than $175 million to 49 whistleblowers since issuing its first award in 2012.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.