SEC Awards $22 Million to Two Whistleblowers Whose Information Resulted in Successful SEC Enforcement Actions Against A Financial Services Firm

On May 10, 2021, the Securities and Exchange Commission (“SEC”) announced an award of approximately $22 million to two whistleblowers whose information and assistance aided the SEC that resulted in successful SEC enforcement actions brought against a financial services firm.

The first whistleblower, who was the initial source of the investigation, received an award of $18 million.  The second whistleblower, who submitted information much later after the investigation was already underway, received an award of $4 million.  Both whistleblowers assisted the SEC’s staff to better understand complex transactions related to the matters under investigation.

“This case demonstrates once again the value of the whistleblower program in helping to protect investors, and the Commission’s continued commitment to rewarding individuals who provide high-quality tips,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower.

In total, the SEC has awarded over $838 million to 156 individuals since the whistleblower program became effective in August 2011. All awards are paid out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.

Congress established the whistleblower program to incentivize whistleblowers with specific, timely, and credible information about federal securities laws violations to report to the SEC.  A whistleblower may receive an award if they voluntarily provide the SEC with qualifying information, leading to successful enforcement. The award can range from 10 percent to 30 percent of the money collected due to the enforcement action.

Individuals who have information regarding fraud or other violations of federal securities laws should contact law firm Iorio Altamirano LLP for a free consultation to review your legal rights on how to file a whistleblower tip to the SEC and preserve eligibility to receive a whistleblower award.

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