On November 3, the U.S. Securities and Exchange Commission (SEC) awarded $2.5 million to two whistleblowers who voluntarily provided original information that contributed to the success of the same enforcement action. One whistleblower received a $2 million award while the other received a $500,000 award.

Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the agency with original information which leads to a successful enforcement action, are entitled to awards of 10-30% of the funds collected by the government. The SEC determines the exact percentage to award a whistleblower based on a number of factors.

In the award order, the SEC explains: “In comparing the relative contributions of Claimant 1 and Claimant 2, we note that Claimant 1’s was the more important because Claimant 1’s tip and subsequent information was received several years before Claimant 2’s and provided a detailed overview… that caused the opening of the investigation and guided its initial stages.”

“Finally, we note that, in contrast to Claimant 1, who persistently alerted the Commission to the ongoing abusive practices for a number of years before the investigation was opened, Claimant 2 delayed reporting to the Commission for several years after becoming aware of the wrongdoing,” the award order further states.

The SEC also notes that the first whistleblower “provided the Commission’s investigative staff with extensive and ongoing assistance during the...

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