The U.S. Securities and Exchange Commission (SEC) collected a historic $8.2 billion in civil penalties and disgorgement funds from successful enforcement actions in fiscal year 2024, the highest amount collected in the history of the agency. The $8.2 billion is comprised of $6.1 billion in disgorgement and prejudgment interest and roughly $2.1 billion in civil penalties. In the same period, the SEC filed 538 enforcement actions, a 26 percent decline in enforcement actions from fiscal year 2023 and distributed $345 million to harmed investors.
SEC’s Record-Breaking Enforcement Actions in 2024
As part of the agency’s record-setting year, the SEC obtained the highest remedy ever obtained by the agency following a trial: Terraform agreed to pay $4.47 billion in disgorgement, prejudgment interest, and civil penalties after a jury found the crypto firm Terraform Labs and its founder, Do Kwon, liable for lying to investors.
Other notable recoveries secured by the agency in fiscal year 2024 include a $249 million settlement with Morgan Stanley to resolve allegations that the company and a former supervisor made false statements and misused information related to block trading, and a $100 million settlement with FirstEnergy Corporation connected to a political corruption scheme.
The Role of Whistleblowers in SEC Success
The Commission’s success in fiscal year 2024 could not have been obtained without the 47 whistleblowers who received a combined total of over $255 million in rewards for reporting wrongdoing to the SEC. The $255 million awarded to whistleblowers is the third highest amount recorded in a single year since the SEC Whistleblower Program’s inception in 2011. The $255 million includes an award of approximately $98 million, split between two whistleblowers. That award is the fifth largest award granted in the history of the SEC’s Whistleblower Program.
Eligible whistleblowers that provide credible original information to the SEC may be entitled to an award of 10% to 30% of monies collected if the SEC uses their information in an enforcement action that results in the agency recovering over $1 million in monetary sanctions. The SEC has awarded over $2.2 billion to 444 individual whistleblowers since 2011.
SEC Actions to Protect Whistleblower Rights
Part of the SEC’s oversight mandate is to ensure that whistleblowers can speak freely to the Commission about securities violations. In 2024, the SEC brought 11 enforcement actions against individuals and entities that tried to impede whistleblowers’ rights by either limiting their ability to contact the SEC or requiring them to waive their right to a possible whistleblower award.
This past year, the SEC assessed the largest penalty on record for violating the whistleblower protection rule — an $18 million civil penalty against J.P. Morgan for impeding hundreds of customers from reporting potential securities law violations. The company had asked customers to sign confidential release agreements that required them to keep confidential the settlement, underlying facts relating to the settlement, and information relating to the account at issue. In addition, the agreements prohibited customers from voluntarily contacting the SEC.
A Message from the SEC on Whistleblower Protections
In the office’s most recent annual report to Congress, Creola Kelly, Chief of the Office of the Whistleblower stressed the importance of whistleblowers, observing that “Whistleblowers play a valuable role in helping to protect the U.S. financial markets by bringing the Commission information about potential securities law violations. …The Commission sent a strong message that agreements and conduct that impede communication with the SEC will not be tolerated.”
How to Report Securities Fraud as a Whistleblower
Whistleblowers who suspect possible securities fraud can contact an experienced SEC whistleblower attorney at Phillips & Cohen. Phillips & Cohen is the most successful law firm representing whistleblowers before the SEC and the Commodity Futures Trading Commission, with 24 awards for clients under the Dodd-Frank whistleblower reward programs.