December 31, 2023

SEC divides $28 million award between seven whistleblowers

On December 22, 2023, the US Securities and Exchange Commission announced the award of $28 million to seven whistleblowers who, according to the SEC, “provided valuable information and substantial assistance that played a critical role in the SEC returning millions of dollars to harmed investors.”  Four of the award recipients brought their claims jointly (“Claimants 2, 3, 4, and 5”), two others brought a separate joint claim (“Claimants 6 and 7”), and a seventh filed a separate individual claim (“Claimant 1”).

As described in the SEC order, Claimant 1 received the largest portion of the award ($13 million) because, after attempting several times to report concerns internally to company management, the claimant provided the SEC with “detailed and highly significant information early in the investigation,” thereby allowing the SEC staff to advance their investigation efficiently.  Claimant 1 also participated in voluntary SEC interviews, provided key documents to the SEC that “served as a guide for the investigation,” identified for the SEC key witnesses, and suffered hardships as a result of reporting concerns internally to company management.  The SEC drew similar conclusions regarding the assistance provided by Claimants 2, 3, 4, and 5, and awarded them jointly $13 million.  Claimants 6 and 7 also satisfied the criteria for a whistleblower award, but received a smaller share of it: $2 million.  The SEC noted that although the information provided by these claimants was helpful, it was provided late in the investigation, and much of the information was already known to the SEC.

Press release | Order