The most recent SEC whistleblower award was a $3.8 million bounty to a whistleblower who offered information to the agency that resulted in a successful enforcement action.
As always, the information provided by the SEC about the whistleblower award was vague so as to protect the identity of the whistleblower. The SEC said the whistleblower provided unique information that assisted the agency in stopping an ongoing fraud scheme. Though the information provided was significant, the SEC said it was “discrete and narrow in scope” and relatively limited, as the whistleblower did not have firsthand knowledge of the fraud and could not assist further after the initial tip.
This latest award brings the SEC program’s total to $505 million across 87 different whistleblowers since the first award was granted in 2012.
What’s interesting about this particular case is that the SEC noted the whistleblower did not have firsthand knowledge or even broad knowledge of the incident, but they were able to receive nearly $4 million for their assistance anyway. There have been a variety of studies indicating secondhand knowledge and information can actually be more useful in some circumstances than firsthand knowledge, as it is more likely to be objective. Whistleblowers who are aware of internal wrongdoing and have even a small amount of helpful information should therefore not avoid contacting the SEC in thoughts that the information they have won’t be enough—even a small amount of information can result in a large recovery, as evidenced by this case.
For more information about the steps you must take if you wish to file a claim through the SEC’s Office of the Whistleblower, contact an experienced whistleblower lawyer at Kardell Law Group.