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Whistleblower Receives Award of More Than $2 Million from the SEC

The U.S. Securities and Exchange Commission (SEC) recently awarded a whistleblower more than $2 million for disclosures that resulted in successful enforcement actions by both the SEC and the U.S. Department of Justice (DOJ).

The whistleblower had previously received an award in connection to SEC covered action. The new $2 million award was based on a portion of sanctions that have been or will be collected in the related action being taken by the DOJ. The release did not include any information about the value of the percentage.

The SEC said the whistleblower provided the same original information to both agencies, which led to the successful enforcement action.

This particular whistleblower qualified for the award because of amendments made to the SEC’s program in September 2020. Under the amendments, there were clarifications made to the types of actions that are considered “related” under whistleblower statutes. Here, the disclosures led to enforcement actions at two different agencies.

Eligibility for SEC awards

The SEC’s whistleblower program gives awards to whistleblowers who offer unique, actionable information in a timely manner that leads to a successful enforcement action. When enforcement sanctions are worth more than $1 million, whistleblowers can recover 10 to 30 percent of the money.

The funds paid out to whistleblowers come from money paid by violators of securities laws, so no money is taken from the harmed parties in theses cases or from taxpayers. Since the first whistleblower award issued in 2012, the SEC has awarded approximately $1.1 billion to 224 individuals (these numbers up to date as of October 29).

For more information about the processes one must go through to file a whistleblower claim through the SEC and recover compensation, contact an experienced whistleblower attorney at Kardell Law Group.

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