The Securities and Exchange Commission today announced awards to four individuals for total payments of almost $5 million. Each of these whistleblowers provided critical information that alerted the Commission of the alleged wrongdoing and resulted in successful enforcement action. This year the SEC has made a record 39 individual awards of approximately $175 million, more than in any prior fiscal year.
In the first order, a whistleblower was awarded nearly $2.9 million for alerting the Commission to hard-to-detect violations. The whistleblower provided critical information and supporting evidence that conserved SEC time and resources.
In the second order, a whistleblower, a former company insider, was awarded more than $1.7 million. This whistleblower provided extensive and ongoing assistance to the investigative team over the course of the investigation.
In the third order, two whistleblowers were awarded nearly $400,000 for jointly providing a tip and giving continuing assistance during the course of the investigation, including meeting with staff and providing detailed information that helped them understand key documents and identify witnesses. The whistleblowers also internally reported their concerns and suffered personal hardships as a result of the reporting.
“Today marks the end of a record-setting year for the whistleblower program. We’ve made significant strides to further streamline and accelerate the evaluation of claims under the rules, substantially increasing the rate at which whistleblower claims are evaluated and awards are issued,” said Stephanie Avakian, Director of the Division of Enforcement. “We remain committed to rewarding the valuable contributions of whistleblowers in a timely and efficient manner.”
“The awards issued in the last month demonstrate the variety and breadth of tips received from whistleblowers,” added Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Award recipients in the last month include company outsiders who provided independent analysis, international whistleblowers who shone a light on hard to detect overseas conduct, and company insiders who provided critical information and substantial assistance that helped the Commission better protect investors and the marketplace. And today, the four individuals awarded each provided the tip that sparked the opening of the case.”
The SEC has awarded almost $562 million to 106 individuals 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 10-30% of the money collected when the monetary sanctions exceed $1 million.
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.
For information on filing a securities related whistleblower claim call Sallah Astarita & Cox at 212-509-6544.
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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.
