On May 5, 2023, the Securities and Exchange Commission (“SEC”) issued an order (the “Order”)1 providing that it would pay a $279 million award to a whistleblower who assisted with the enforcement of an action by the SEC and two other related actions brought by unnamed agencies. While the whistleblower’s (“Whistleblower 1”) information did not cause the SEC to initiate an investigation into the reported activity, the information caused the SEC to expand the scope of its investigation. In addition, Whistleblower 1 reportedly provided “substantial, ongoing assistance” to the SEC throughout the action. The Order reaffirms the SEC’s willingness to pay substantial whistleblower awards and may lead to increased whistleblower activity. Public companies should revisit their policies and controls for handling internal whistleblower complaints and encourage internal reporting of potential whistleblowers’ concerns.
The SEC’s Award to Whistleblower 1 & Denial of Awards to Whistleblowers 2 and 3
The SEC maintains a whistleblower program whereby it pays awards to whistleblowers who voluntarily provide the SEC with original information that leads to the successful enforcement by the SEC of a federal court or administrative action in which the SEC obtains monetary sanctions totaling more than $1,000,000.2 Under Rule 21F-4(c), information is considered to lead to the successful enforcement of a judicial or administrative action if:
(1) the information was “sufficiently specific,...
Dish Wireless LLC agreed to pay roughly $17 million to resolve allegations that it violated the False Claims Act, common law, and the Communications Act of 1934 relating to claims submitted to Fed...