Consumer Fraud

SEC Awards 3 Whistleblowers $55.5 Million in Two Separate Cases

SEC Office of the Whistleblower wikipedia image 342x210 SEC Awards 3 Whistleblowers $55.5 Million in Two Separate CasesThe U.S. Securities and Exchange Commission’s (SEC) Whistleblower Office recently announced it has paid out more than $55.5 million to three whistleblowers who assisted regulators in stopping violations, fraud, and other misconduct harming investors.

On Sept. 6, the SEC said that it had awarded two whistleblowers who assisted regulators in the same case. One whistleblower will receive a $39 million award – the agency’s second-largest payout to date – and the other will receive a $15 million award for providing “critical information and continued assistance” that helped the SEC crack down on the offending company.

On Sept. 14, the SEC announced another whistleblower award of $1.5 million in a separate case. That whistleblower also provided the SEC with “vital information and ongoing assistance that proved important to the overall success of an enforcement action.”

The agency noted that it reduced the award because the whistleblower failed to report the misconduct promptly and benefited financially during the delay.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said that particular award “reflects the value of the information while underscoring the need for individuals to come forward without delay so that our enforcement staff may quickly leverage the information and prevent further investor harm.”

“This is especially critical and, as is the case here, may result in an award reduction where an individual provided valuable information but it came after receiving a benefit from the wrongdoing,” she added.

The SEC’s whistleblower program has awarded about $322 million to 58 individuals since issuing its first award in 2012. In that time, more than $1.6 billion in monetary sanctions have been ordered against violators based on insider tips provided by whistleblowers.

“Whistleblowers serve as invaluable sources of information, and can propel an investigation forward by helping us overcome obstacles and delays in investigation,” Norberg said. “These substantial awards send a strong message about the SEC’s commitment to whistleblowers and the value they bring to the agency’s mission.”