On July 14, the U.S. Securities and Exchange Commission (SEC) announced that it awarded a whistleblower $3.8 million. According to the SEC, the whistleblower’s “information and assistance helped both the SEC and another agency bring successful actions against the perpetrator of a fraudulent securities offering.” The whistleblower provided information that helped the SEC stop an ongoing fraud and return millions of dollars to harmed investors.
Through the SEC Whistleblower Program, SEC whistleblowers, who provide the agency with original information that aids in a successful enforcement action, are entitled to a whistleblower reward ranging from 10-30% of funds recouped by the government.
“Today’s award underscores the paramount role the SEC’s whistleblower program plays in safeguarding the Main Street investor. Since the beginning of the program nearly ten years ago, the SEC has ordered more than $2.5 billion in financial remedies based on whistleblower information, including more than $1.4 billion in disgorgement and prejudgment interest, of which almost $750 million has been returned or is scheduled to be returned to harmed investors,” stated Jane Norberg, Chief of the SEC’s Office of the Whistleblower.
This whistleblower is the 87th individual to receive an SEC whistleblower award since the first award was granted in 2012. The total amount of the awards now totals approximately $505 million. In the past ten months alone, SEC whistleblower awards totaling almost $119 million have been given to 20 individuals, including last month’s record-setting $50 million award.
“Whistleblowers are essential to keeping waste, fraud, and abuse out of the private sector,” said whistleblower attorney Stephen M. Kohn, partner at the qui tam law firm Kohn, Kohn & Colapinto. “Strong whistleblower laws like the Dodd Frank Act allow individuals to come forward with information of crimes without having to risk being retaliated against.”
The SEC whistleblower program was established in 2010 with the passage of the Dodd-Frank Act. In addition to allowing whistleblowers to obtain rewards, the program has anti-retaliation procedures to protect whistleblowers, which include the protection of whistleblowers’ confidentiality.
Read the SEC press release: SEC Issues $3.8 Million Whistleblower Award