SEC issues new whistleblower awards under Dodd-Frank

On December 7, 2020, the US Securities and Exchange Commission issued three new orders granting whistleblower awards totaling to nearly $3 million. 

The first order awarded a “company insider” nearly $1.8 million for providing the SEC with detailed information about alleged wrongdoing that would otherwise have been difficult to detect.  The order also noted the claimant’s “extraordinary assistance” and that the claimant had raised the issue internally at claimant’s company before alerting the SEC. 

In a second order, the SEC granted awards to two individuals who provided information related to the same enforcement action.:  The first whistleblower provided sufficient detailed information for the SEC to initiate an investigation and was awarded about $500,000.  The SEC granted this award despite the claimant’s failure to follow the tips, complaints, and referrals (TCRs) filing requirements.  The SEC noted that, even though claimant had counsel, counsel may have misunderstood communications from the SEC staff as to whether the claimant had properly completed the TCR filing process, but that the claim was otherwise worthy of award.  Thus, the SEC excused the failure to meet the TCR filing requirements.  The second whistleblower received approximately $250,000 for providing information that led to the inclusion of additional allegations in the enforcement action.  The SEC noted that it was providing this award even though the information was submitted close to the completion of the SEC’s investigation.  

The third whistleblower award, close to $400,000, was divided between two individuals who jointly submitted a claim.  According to the order, their analysis led to the initiation of an investigation, and they provided continued and substantial assistance during the course of the investigation.  The order states that the award was split evenly between the two claimants.  

According to the SEC, nearly $170 million has been awarded to 17 whistleblowers in the first quarter of the SEC’s 2021 fiscal year.  The SEC has awarded approximately $731 million to 123 individuals since issuing its first award in 2012.

SEC Press Release | Order 1 | Order 2 | Order 3

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