The Securities and Exchange Commission (SEC) recently announced a $1.6 million award to a whistleblower who provided information that helped form the basis for charges that led to a successful enforcement action.
According to the information provided by the SEC, the information submitted by the whistleblower prompted investigators in the Department of Enforcement to look closely into the case, and ultimately find evidence that supported the whistleblower’s claims. SEC officials said the allegations would likely have gone undetected had the whistleblower not reported the information.
The whistleblower’s award likely would have been higher even than it was, but the SEC noted the whistleblower did unreasonably delay in reporting the information to the Commission. However, the delay occurred at least partially before the whistleblower award program was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, so SEC officials did not factor that delay in as harshly as they might in other circumstances.
This $1.6 million award marked the third award through the SEC whistleblower program this year. The day after this award was handed out, the SEC announced two more smaller awards as well.
Since the program was established, the SEC has awarded about $396 million to 76 people. Whistleblowers who report unique, actionable information through the SEC whistleblower program are eligible for 10 to 30 percent of the recovery money if the penalties in the case exceed $1 million. All award payments are made through an investor protection fund set up by congress for the purpose of incentivizing whistleblowers, and that fund is financed through monetary sanctions paid to the SEC by violators.
For more information about the steps you must take to submit a whistleblower claim to the SEC, contact an experienced Whistleblower attorney at Kardell Law Group.