On August 4, the U.S. Securities and Exchange Commission (SEC) announced that it granted a total of $104 million in awards to seven whistleblowers, citing their willingness to provide original information which led to a successful enforcement action. The combined award is the fourth largest in the history of the SEC Whistleblower Program.
“These awards are objective proof that whistleblowing works, and works better than anyone anticipated,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Whistleblowers are the eyes and ears of enforcement, and are essential in holding fraudsters accountable.”
Through the SEC Whistleblower Program, whistleblowers who (1) voluntarily support/open an investigation, (2) provide original information to that investigation, and (3) lead to successful enforcement action are entitled to monetary awards of 10-30% of the funds collected by the government. Under the Dodd-Frank Act’s related action provisions, SEC whistleblowers are entitled to 10-30% of the funds collected in any related action as well as in the relevant SEC enforcement action.
The seven whistleblowers awarded in this case all participated in the investigation in a manner that met these three criteria. The group was composed of two sets of joint claimants and three single claimants who assisted in the investigation by “providing documents supporting the allegations of misconduct, sitting for interviews, and identifying potential witnesses,” according to...
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