SEC awards millions to whistleblowers

In recent weeks, the Securities and Exchange Commission has awarded over $182 million to whistleblowers who provided crucial information to the SEC that helped its investigators stop fraud in both the domestic and international markets. 

What most people fail to realize is that Congress authorized an investor protection fund in 2012 that allows the SEC to make substantial awards to whistleblowers without harming investors. The awards come from the money the SEC recovers in successful enforcement actions. Generally, the award to any given whistleblower amounts to somewhere between 10-30% of the monetary sanctions the SEC recovers against wrongdoers. To date, the SEC has made whistleblower awards totaling approximately $719 million. 

Nov. 3, 2020, award announcement

In a news release dated Nov. 3 of this year, the SEC announced a $28 million award to a whistleblower who voluntarily provided information that significantly helped the SEC launch an internal investigation into the suspect activities of the wrongdoer in question that ultimately resulted in a successful enforcement action. 

In the same news release, the SEC announced that it recently awarded over $150 million to four whistleblowers who aided its ongoing efforts to stop fraud. 

Nov. 5, 2020, award announcement

Two days later, the SEC issued a subsequent news release announcing awards of $3.6 million and $750,000 respectively to two whistleblowers whose information likewise significantly aided the SEC in halting securities fraud. 

The SEC goes out of its way to protect the identity of whistleblowers to whom it makes awards. All legal documents pertaining to these awards redacts any information regarding the whistleblower, the person or company successfully sued, the amount of the total recovery and the amount of the award itself. 

Archives

FindLaw Network