February 28, 2020

$7 million award shows continuing robustness of SEC whistleblower reward program

On February 28, 2020, the US Securities and Exchange Commission issued an order determining a whistleblower award claim based on the whistleblower’s provision of original information that led to a successful enforcement action.  In conformance with Rule 31F-6 of the Securities Exchange Act of 2934, the claims review staff of the SEC took into consideration the significance of information provided, the assistance provided to the SEC in its enforcement action, the public interest in deterring violations, participation in or interference with internal compliance and reporting systems, and any culpability and unreasonable reporting delays, if any.  The SEC concluded that the informant’s tip exposed abuses, and that he or she provided extensive and ongoing assistance during the investigation by identifying witnesses and helping the SEC staff to understand complex matters related to the investigation.  Moreover, according to the SEC, the whistleblower undertook to remedy the issues from within, and suffered hardships as a result of these persistent efforts.

The SEC order is redacted to protect the identity of the whistleblower, as mandated by the Dodd-Frank Act.  Whistleblower awards range between 10% and 30% of the amount collected in the enforcement action, provided the monetary sanctions exceed $1 million.

SEC press release | Order