SEC announces multiple whistleblower awards totaling more than $3.6 million

On December 18, 2020, the US Securities and Exchange Commission awarded three separate whistleblowers a total of over $3.6 million.

The SEC awarded the first whistleblower over $1.8 million for providing significant information about a fraudulent scheme.  This whistleblower took immediate steps to alert the SEC to the hard-to-detect scheme, despite suffering “personal hardship,” and provided substantial assistance to the SEC (including testimony, key documents, and other information).  As a result of the whistleblower’s actions, the SEC was able to return millions of dollars to affected investors.

The SEC awarded the second whistleblower over $1.2 million, despite the whistleblower’s involvement in the planning and initiation of the underlying misconduct.  The SEC credited the whistleblower with voluntarily providing original information that led to a successful enforcement action, and stated that the award was warranted because of undisclosed “specific facts and circumstances” present in the case.  However, the SEC did adjust the award downward because the whistleblower was “culpable for actively participating in and financially benefitting from the fraudulent scheme” and because the whistleblower unreasonably delayed reporting the scheme to the SEC.

Finally, the SEC awarded the third whistleblower over $500,000, over objections by the whistleblower that a higher award was warranted.  The SEC explained that the whistleblower provided significant, helpful information and ongoing assistance to the SEC, but denied the whistleblower’s request for a higher award because the whistleblower had known about the underlying fraudulent scheme for at least two years before reporting the misconduct to the SEC. 

The SEC has awarded approximately $735 million to 127 individuals since the program’s inception in 2012.

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

 

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