On January 19, the U.S. Securities and Exchange Commission (SEC) awarded $18 million to three whistleblowers who separately made disclosures which contributed to the success of the same enforcement action. The whistleblowers’ voluntary disclosures led to millions of dollars being returned to harmed investors.
Qualified SEC whistleblowers, individuals who voluntarily report original information that leads to a successful enforcement action, are entitled to monetary awards of 10-30% of the sanctions collected by the SEC in the enforcement action.
The first whistleblower’s information “alerted Commission staff to the fraudulent scheme alleged in the Covered Action, and was the main basis for opening the investigation that resulted in the Covered Action,” according to the award order. The SEC further notes that the whistleblower’s information was “detailed and highly significant,” “saved considerable Commission time and resources,” and “had a significant impact on the overall success of the enforcement action.” The whistleblower also provided the SEC ongoing assistance throughout the course of the investigation.
According to the SEC, the second whistleblower made a disclosure after the first and much of their information was duplicative. However, the award order does note that the whistleblower’s disclosure “included new information relating to certain charges filed in the Covered Action.”
The third whistleblower made their disclosure “after significant progress had already...
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