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SEC awards whistleblowers more than $1.1 million



The Securities and Exchange Commission (SEC) announced giving more than $3.6 million in total to whistleblowers in connection with three separate enforcement actions.

The first whistleblower received over $1.8 million for providing significant information about a fraudulent scheme. The whistleblower took immediate steps to mitigate the harm to investors and provided substantial assistance to the staff, including providing testimony, key documents, and other information that saved SEC time and resources and contributed to an enforcement action that resulted in the return of millions of dollars to harmed investors.

The SEC awarded a second whistleblower more than $1.2 million for providing information that led to a successful enforcement action. In making the award, the SEC determined that the whistleblower’s culpability and unreasonable delay impacted the award amount.

A third whistleblower was awarded more than $500,000. The whistleblower provided significant information and ongoing assistance that led to the success of an enforcement action. In issuing the award, the SEC waived the TCR filing requirement based on the unique facts and circumstances of the case.

Whistleblower

The SEC also awarded over $100,000 to a whistleblower whose independent analysis led to a successful enforcement action. Among other things, the whistleblower conducted an analysis using information from publicly available documents to calculate an estimate of an important metric for a company, and then showed that the company’s disclosures regarding that metric were implausible. This is the fifth individual in FY21 who received an award based on independent analysis.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower said:

These awards underscore the breadth of ways that company insiders, as well as whistleblowers not affiliated with a company, can positively impact SEC investigations. Whistleblowers who provide high-quality information or analysis may be eligible for an award where their information causes staff to open an investigation or meaningfully advances an existing investigation.

So far, the agency has awarded over $737 million to total of 133 individuals since the first award was issued in 2012. Payment of the awards is taken out of an investor protection fund set up by Congress. It is financed through monetary sanctions of security law violations paid to SEC.

To be eligible for award, a whistleblower needs to voluntarily provide the commission with reliable information that leads to successful enforcement action. The awards range between 10 and 30 % of the money collected by SEC when the sanction is for more than $1 million.

According to the Dodd-Frank Act, SEC must protect the identity of the whistleblower and not disclose any information that could reveal it.


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SEC awards whistleblowers more than $1.1 million

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