October 16, 2020

SEC awards nearly $6 million to five whistleblowers

On October 15, 2020, the US Securities and Exchange Commission awarded more than $800,000 to a whistleblower whose information led to multiple successful enforcement actions.  The award was granted after a Preliminary Determination issued by the Claims Review Staff found that the individual should not receive an award because the individual was “not a ‘whistleblower.’”  The order does not provide further explanation as to the Claims Review Staff’s finding.  Upon appeal, the full Commission reviewed the claim and determined that the Claimant “satisfied the requirements for being considered a whistleblower” and further found that the Claimant “voluntarily provided original information” to the SEC that led to a successful enforcement action.  Thus, as noted in the Order, even though the Claimant’s assistance did not go beyond this initial tip, the SEC deemed the information provided met the criteria for receiving a whistleblower award.  

This award determination follows three significant whistleblower awards announced on September 30, 2020, which resulted in payments of almost $5 million to four separate claimants.  With respect to the first order listed below, the whistleblower received $2.9 million for providing critical information and supporting evidence in the early stages of an investigation of a hard-to-detect securities violation.  Claims from two other individuals were denied as the information provided did not cause the SEC to open an investigation (it had already been opened) nor did the information significantly advance the investigation.  
With respect to the second order below, the claimant received a reduced award of $1.7 million.  Although the claimant’s information was significant and the claimant provided ongoing and extensive assistance to the SEC, the claimant was delayed in providing the information to the SEC.  This resulted in the SEC reducing the award the claimant would have otherwise received.  
With respect to the third award listed below, the SEC determined that two claimants should jointly receive nearly $400,000.  The joint award was deemed appropriate because the information was submitted jointly.  The claimants provided detailed information and continued assistance to the SEC, and, according to the order, “suffered personal hardships as a result of their reporting.”

To date, as part of the whistleblower program, the SEC has awarded over $562 million to 107 individuals.  

SEC Press Release – Oct 2020 | SEC Order | SEC Press Release – Sept 2020 | SEC Order 1 | SEC Order 2 | SEC Order 3