Twelve million dollars was awarded to two whistleblowers who provided information aboout the misconduct of a registered broker-dealer. Their disclosures contributed to the success of an SEC enforcement action against the company.
The SEC awarded $9 million to one of the whistleblowers and $3 million to the other. According to the award order, the discrepancy in award sizes was due to the fact that “Claimant 1’s information was more important to the investigation because Claimant 1’s information was received by the Commission several years before Claimant 2’s information.”
According to the SEC, the second whistleblower “submitted important new information during the course of the investigation and will receive an award of more than $3 million.” However, the SEC limited the size of the second whistleblower’s award in part because of an unreasonable delay in reporting the misconduct.
Qualified whistleblowers are entitled to awards of 10-30% of the sanctions collected by the SEC in the case connected to their whistleblowing. To qualify for an award, an individual must voluntarily disclose original information to the SEC that contributes to the success of an enforcement action.
In Fiscal Year 2022, the SEC “awarded approximately $229 million in 103 award.
The SEC whistleblower program allows whistleblowers to remain anonymous. The SEC examines various aspects of corporate behaviors including market manipulation, insider trading, internal control requirements and corporate behaviors that violate SEC regulations that could or do harm investors.
Jeffrey Newman is a whistleblower lawyer who represents whistleblowers in the SEC program and also handles cases under the False Claims Act (FCA). He can be reached at 617-823-3217 or at Jeff@JeffNewmanLaw.com. His firm website is www.JeffNewmanLaw.com
