SEC Announces Award of $6 Million to Joint Whistleblowers
On April 21st, 2025, the Securities and Exchange Commission (SEC) announced a joint award of $6 million to two whistleblowers. The federal agencies notes that the whistleblowers willingly came forward and:
- Provided original information that prompted an investigation; and
- Provided a roadmap to allow authorities to take enforcement action.
An agency official noted that the examination may have never taken place at all if not for the information from the whistleblowers. In this article, our Miami securities lawyer for whistleblowers provides a more comprehensive overview of the standard for receiving an award.
The Requirements to Qualify for an SEC Whistleblower Award
The SEC Whistleblower Program exists to encourage people who have information about suspected securities fraud—usually insiders—to come forward and share that information with authorities. To be eligible for an award under the SEC Whistleblower Program, a person must:
- Voluntarily provide the SEC with original information that leads to a successful enforcement action resulting in monetary sanctions in excess $1 million.
In this context, the term “voluntary” means the disclosure was made before any request or inquiry from the SEC or other regulatory or law enforcement authority. The term “original information” means that what is being shared must be derived from the whistleblower’s independent knowledge or analysis and must not be known to the SEC from any other source unless.
SEC Whistleblowers Awards are 10 to 30 Percent of Enforcement Action
How much is an SEC whistleblower award worth? The answer depends on the specific circumstances of the case—and, most importantly, the scope of the enforcement action. If a whistleblower meets the eligibility requirements, the SEC is authorized to issue an award ranging from 10 percent to 30 percent of the total monetary sanctions collected in the resulting enforcement action. The award range is governed by 17 C.F.R. § 240.21F-6. That statute allows the SEC discretion in determining the percentage within the statutory range. The purpose of the range is to provide flexibility to reward whistleblowers based on the quality of their contributions.
Value of Information and Cooperation Can Impact Amount of Award
Two major factors that will determine where in the range the SEC opts to issue an award are: 1) The value of the information and 2) The extent of the cooperation provided by the whistleblower. As demonstrated in this recent case, the whistleblowers were commended by the SEC both because they provide highly original information and because they voluntarily provided regulators with a roadmap to uncover the securities fraud. Conversely, the SEC also has the power to reduce (or deny) the value of a whistleblower award if the whistleblower delayed reporting, was complicit in the underlying misconduct, or impeded an internal investigation in any matter.
Contact Our Miami SEC Whistleblower Award Attorney Today
At Carlson & Associates, P.A., our Miami securities lawyer has the skills and experience to represent whistleblowers. If you are preparing to make a protected disclosure to the SEC, we are here to help. Contact us now to arrange a fully confidential initial consultation. With an office in Miami, we represent whistleblowers in securities law matters in Florida and beyond.
Source:
sec.gov/newsroom/press-releases/2025-67
