The U.S. Securities and Exchange Commission’s (SEC) Whistleblower Office has had a busy month, awarding an impressive $124 million to whistleblowers. Last week alone, the federal agency announced two whistleblowers will receive awards of more than a combined $98 million. Days later, the SEC announced a $24 million award to two whistleblowers. And earlier in the month, the SEC awarded a whistleblower $2 million, bringing the total awarded to whistleblowers by the SEC in August to $124 million thus far.
SEC Whistleblower Awards in August 2024
Last week’s awards were made for information and assistance that led not only to a successful SEC enforcement action, but also to an action brought by another agency.
The current Chief of the SEC’s Office of the Whistleblower Creola Kelly said of last week’s awards, “Whistleblower information and cooperation play an integral role in the SEC’s enforcement efforts. Without these whistleblowers’ information, the violations would have been difficult to detect.”
SEC’s Recognition of Multiple Whistleblowers
Last week’s awards reflect that the SEC values contributions from more than one whistleblower to the same enforcement action. According to the SEC, the first whistleblower’s tip prompted the opening of the investigations and provided critical information and ongoing assistance. That whistleblower will receive an award of $82 million. The second whistleblower, who provided information later, significantly contributed to one aspect of the SEC’s enforcement action and will receive an award of $16 million.
Largest SEC Whistleblower Awards to Date
The $82 million award is among the SEC’s largest awards to a whistleblower, with the highest previous awards being $279 million, the single largest award in program history, $114 million, $110 million, and $104 million respectively. The whistleblower program received a record 18,000 whistleblower tips over the last fiscal year and awarded almost $600 million to 68 individual whistleblowers.
The SEC followed the announcement of last week’s award by this week announcing two more whistleblower awards of a combined $24 million. This week’s financial awards were also for information that led to both a successful SEC enforcement action and a related action brought by another agency. Like last week’s award, these awards recognized the contributions of more than one whistleblower to the same enforcement action.
Echoing her prior comments, Kelly said that “Today’s awards highlight the incredible public service provided by whistleblowers. The information would have been difficult to obtain in the absence of the whistleblowers as it pertained to conduct occurring abroad.”
Contributing to the month of August’s large award totals, the SEC also awarded a whistleblower approximately $2 million early in August 2024. The whistleblower in this matter had submitted a timely tip with detailed analysis to the SEC, which caused the SEC to open an investigation into issues identified in the whistleblower’s tip.
SEC Whistleblower Program and Dodd-Frank Act Protections
Payments to whistleblowers are made from an investor protection fund, which is financed through monetary sanctions paid to the SEC by securities law violators. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.
According to the SEC’s 2023 annual report on the whistleblower program, the most common complaint categories reported by whistleblowers were manipulation (24%), offering fraud (19%), initial coin offerings and crypto-asset securities (14%), and corporate disclosures and financials (10%). Since its launch, the whistleblower program has helped the SEC recover more than $6 billion from fraud.
Contact Phillips & Cohen for Whistleblower Representation
The Dodd-Frank Act, which created the SEC whistleblower program emphasized the need to protect whistleblower confidentiality. Whistleblowers may file tips anonymously and the SEC protects the whistleblower’s confidentiality.
For a free, confidential review of your matter by experienced CFTC or SEC whistleblower lawyers, contact Phillips & Cohen. The firm’s partners include the former first head of the SEC Office of the Whistleblower, the former director of the CFTC’s Whistleblower Office and numerous attorneys with decades of experience representing whistleblowers.