Securities Arbitration Lawyer Blog
On August 10, 2021, the Securities and Exchange Commission (“SEC”) announced whistleblower awards of nearly $6 million to two whistleblowers who provided information and assistance to the SEC in separate enforcement proceedings. The latest awards come after the SEC revealed on August 6, 2021, an award of more than $3.5 million to three individuals in two separate proceedings.
In the first enforcement proceeding (announced on August 10, 2021), a whistleblower was awarded more than $3.5 million for providing the regulator with valuable new information that resulted in the expansion of an existing investigation into a new geographic area. The whistleblower also provided additional information and assistance to help the agency bring charges in the underlying enforcement action.
In the second enforcement proceeding (announced on August 10, 2021), a whistleblower was awarded more than $2.4 million for providing the SEC with a tip that promoted an investigation. The whistleblower also provided the SEC with documents and identified potential witnesses.
After the most recent awards were announced, Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, provided the following commentary: “With today’s orders, the SEC has made whistleblower awards to 14 individuals in less than a month, reflecting the SEC’s commitment to reward whistleblowers who provide new, critical information that leads to successful enforcement actions.”
In the first order (announced on August 6, 2021), the SEC awarded approximately $2 million to a whistleblower who alerted the SEC to an ongoing fraud. The tip prompted an investigation and led to a successful SEC enforcement action. In addition to providing the tip, the informant participated in multiple voluntary interviews and provided the SEC with documents and information.
In the second order (announced on August 6, 2021), the SEC awarded approximately $1 million to one whistleblower and $500,000 to another whistleblower who independently provided valuable information to the SEC in an ongoing investigation.
In total, the SEC has awarded over $956 million to 195 individuals since the whistleblower program became effective in August 2011. The awards are paid out of an investor protection fund established by Congress financed entirely through monetary sanctions paid to the SEC by securities law violators. Money is not 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 law 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.
Whistleblowers play an important role in fighting corruption, protecting retail investors, and maintaining a free and healthy market. Iorio Altamirano LLP, an investor advocate law firm, is committed to the effective representation of whistleblowers.
Individuals who have information regarding fraud or other violations of federal securities laws should contact whistleblower 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.