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SEC Issues More than $500,000 to Whistleblower Under Safe Harbor Rule

In late March, the U.S. Securities and Exchange Commission (SEC) announced an award of more than $500,000 to a whistleblower who provided information hat led to a successful enforcement action.

The order, which was redacted in accordance with SEC rules to protect the whistleblower’s identity, stated the whistleblower brought forth concerns about internal securities violations, resulting in an internal investigation by the company in question. After the conclusion of the investigation the company reported the information and its findings to an outside agency, which referred the case to the SEC.

During the SEC investigation, the initial whistleblower provided helpful documents and met with agency staff, allowing the SEC (and another federal agency) to file prompt actions and eliminate the fraudulent scheme. The SEC noted the whistleblower submitted a tip to the SEC within 120 days of reporting the violations, satisfying the “safe harbor” provision under the SEC’s whistleblower rules. This allowed the Commission to treat the information from the whistleblower as though it was submitted on the same day the whistleblower provided the information to their employer.

SEC whistleblower program continues to be successful

With this award, the SEC had paid out over $760 million to 145 whistleblowers since the program began in 2012. The award also marked the 40th of the fiscal year, surpassing last year’s record of 39 individual awards. In addition, whistleblowers in the first half of the 2021 fiscal year had already earned nearly $200 million in awards, a staggering figure that is only expected to swell.

To learn more about your rights and responsibilities as a whistleblower and how you could potentially recover compensation and awards for submitting information to the SEC, contact a trusted whistleblower attorney at Kardell Law Group.

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