The U.S. Securities and Exchange Commission (SEC) recently granted whistleblower awards totaling $42 million to claimants who provided information and assistance that contributed to the success of enforcement actions by the SEC and the US Department of Justice (DOJ).
First, on October 15, 2021, the SEC announced an award of $40 million total to two claimants (who received $32 million and $8 million, respectively) whose information and assistance had contributed to the success of an SEC enforcement action. The SEC explained that the first claimant—who provided the initial information that caused the SEC to open the investigation, and thereby exposed difficult-to-detect violations—provided “substantial assistance” to the SEC, including identifying witnesses and explaining complex fact patterns. By contrast, the second claimant (who received the smaller award) had unreasonably delayed reporting for several years after becoming aware of the wrongdoing.
Second, on October 29, 2021, the SEC announced an award of $2 million to a claimant who provided information leading to a “related” enforcement action by the DOJ. The SEC explained that this claimant had previously received a whistleblower award from the SEC for providing information that supported an SEC enforcement action. This same claimant subsequently provided the same information to the DOJ, thus qualifying for the second award. The SEC explained that this claimant qualified for the additional $2 million whistleblower award based on December 7, 2020 amendments to the SEC’s Whistleblower Rules, which made “clear that non-prosecution and deferred prosecution agreements entered into by the DOJ are related actions upon which whistleblowers may receive awards.”
To date, the SEC has awarded more than $1.1 billion in whistleblower awards rewards to 218 individuals since the program began in 2012.
SEC Press Release – October 15, 2021| SEC Order | SEC Press Release – October 29, 2021 | SEC Order