Securities Arbitration Lawyer Blog
On May 12, 2021, the Securities and Exchange Commission (“SEC”) announced an award of approximately $3.6 million to a whistleblower who brought valuable information to the SEC’s attention, which lead to an investigation that ended in a successful SEC enforcement action. According to Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, the “whistleblower further assisted the SEC by providing ongoing assistance as the Commission’s investigation progressed.”
Since the beginning of the year, the SEC has awarded over $104 million to whistleblowers:
- May 10, 2021: The SEC awarded $22 million to two whistleblowers whose information and assistance aided the SEC, resulting in successful SEC enforcement actions against a financial services firm.
- April 23, 2021: The SEC announced awards totaling more than $3 million to two whistleblowers in separate enforcement proceedings. One of the whistleblowers received an award of approbatively $3.2 million who alerted SEC staff to violations, identified key issues for staff to focus on, and provided subject matter expertise to the staff that conserved SEC resources. The other whistleblower received more than $100,000 for providing the SEC with significant information and ongoing assistance. The whistleblower’s information and cooperation helped the SEC detect and stop an ongoing fraud preying on investors.
- April 15, 2021: The SEC awarded over $50 million to joint whistleblowers whose information alerted SEC staff to violations that involved highly complex transactions and would have been difficult to detect without their information. According to the SEC’s press release, the joint whistleblowers provided exemplary assistance to the SEC staff during the investigation, including meeting with staff numerous times and providing voluminous detailed documents. As a result of the courageous actions of the whistleblowers, tens of millions of dollars were returned to harmed investors.
- April 9, 2021: The SEC awarded approximately $2.5 million to a whistleblower who provided crucial evidence that supported charges related to a breach of fiduciary duties owed to investors.
- March 29, 2021: The SEC awarded over $500,000 to a whistleblower who provided information and assistance that helped shut down an ongoing fraudulent scheme. The whistleblower initially raised concerns internally before submitting a tip to the SEC.
- March 9, 2021: The SEC awarded approximately $1.5 million to a whistleblower who alerted the SEC to previously unknown conduct and thereafter provided multiple submissions, identified potential witnesses, and met with staff on several occasions
- March 4, 2021: The SEC announced an award of over $5 million to joint whistleblowers located abroad who provided significant information about misconduct abroad that directly supported certain allegations in the enforcement action.
- March 1, 2021: The SEC awarded over $500,000 to two whistleblowers whose tip revealed an ongoing fraud and resulted in multiple SEC actions and a related action from another government agency.
- February 25, 2021: The SEC awarded more than $1.7 million to two whistleblowers in separate proceedings. One of the whistleblowers received over $900,000 after providing significant evidence, including a crucial declaration, that helped expedite an ongoing investigation and enabled the SEC to shut down an ongoing fraudulent scheme that preyed on retail investors. The other whistleblower received over $800,000 for providing important evidence of false and misleading statements made to investors. As a result, millions of dollars were returned to harmed investors.
- February 23, 2021: The SEC awarded $9.2 million to a whistleblower who provided information that led to successful, related actions by the U.S. Department of Justice, one of which was a non-prosecution agreement (NPA) or deferred prosecution agreement (DPA).
- February 19, 2021: The SEC announced that two separate whistleblowers received awards totaling almost $3 million. One of the whistleblowers received over $2.2 million for providing important, high-quality information that aided an investigation. The whistleblower’s tip helped the SEC bring an enforcement action that resulted in the return of millions of dollars to harmed clients. The other whistleblower received an award of almost $700,000 for alerting the SEC to a fraudulent reporting scheme, prompting the opening of the investigation. The whistleblower provided critical evidence to the SEC and helped identify key documents and witnesses.
- January 14, 2021: The SEC awarded nearly $600,000 to a whistleblower that substantially contributed to an open investigation by providing detailed and highly valuable information resulting in critical investigative leads.
- January 7, 2021: The SEC announced awards totaling more than $1.1 million to five whistleblowers who provided high-quality information that led to successful enforcement actions.
In total, the SEC has awarded over $842 million to 157 individuals since the whistleblower program became effective in August 2011. All awards are paid out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.
Congress established the whistleblower program to incentivize whistleblowers with specific, timely, and credible information about federal securities laws violations to report to the SEC. A whistleblower may receive an award if they voluntarily provide the SEC with qualifying information, leading to successful enforcement. The award can range from 10 percent to 30 percent of the money collected due to the enforcement action.
Individuals who have information regarding fraud or other violations of federal securities laws should contact law firm Iorio Altamirano LLP for a free consultation to review your legal rights on how to file a whistleblower tip to the SEC and preserve eligibility to receive a whistleblower award.