The Securities and Exchange Commission (“SEC”) announced an award of approximately $1.5 million to a whistleblower whose information and assistance led to a successful SEC enforcement action.
In connection with the announcement, Jane Norberg, Chief of the SEC’s Office of Whistleblower, said that the “whistleblower alerted the SEC to previously unknown conduct and thereafter provided multiple submissions, identified potential witnesses, and met with staff on several occasions.”
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 that leads to a successful enforcement action. The award can range from 10 percent to 30 percent of the money collected as a result of the enforcement action.
Earlier this year, the SEC awarded more than $9.2 million to a whistleblower. The award marked the first time the SEC made a whistleblower award based on a non-prosecution agreement (“NPA”) or deferred prosecution agreement (“DPA”). The award was made possible after amendments to the SEC’s whistleblower program became effective, which allowed the SEC to interpret NPAs and DPAs as a “related action” that is eligible for a whistleblower award.
In October 2020, the SEC issued the largest award in the whistleblower program’s history, awarding approximately $114 million to a whistleblower. At the time, Jay Clayton, the SEC Chairman, commented that the milestone award was “a testament to the Commission’s commitment to award whistleblowers who provide the agency with high-quality information.” Mr. Clayton also stated that “[w]histleblowers make important contributions to the enforcement of securities laws, and we are committed to getting more money to whistleblowers as quickly and as efficiently as possible.”
The SEC has awarded approximately $759 million to 143 individuals since the whistleblower program became effective on August 12, 2011, and the first award was issued in 2012.
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.