SEC Awards $2 Million To Whistleblower Who Helped Halt Securities Fraud

On October 29th, 2021, the Securities and Exchange Commission (SEC) announced its 224th whistleblower award. The agency has now awarded more than $1.1 billion in financial compensation to whistleblowers who have come forward and voluntarily provided information to help put a stop to securities fraud.

The latest whistleblower award was approved for an anonymous individual who provided information that led to enforcement action by the Department of Justice (DOJ). The whistleblower was awarded $2 million. In this blog post, our experienced Miami investment fraud lawyer discusses the latest award approved through the SEC whistleblower program.

The Second Award for the Same Whistleblower (Related Enforcement Action) 

One of the things that makes this SEC whistleblower award unique is that it is reportedly the first time that the agency has gone back and awarded a second round of financial compensation to a whistleblower. As explained in the press release from the federal securities regulator, the whistleblower previously received an award for the same information after the SEC successfully took enforcement action to stop securities fraud. Now, the DOJ has also taken criminal enforcement action in the same securities fraud case. Additional monetary sanctions were imposed on the perpetrators. In other words, the defendants in this case faced both civil and criminal penalties.

Notably, the SEC published a list of amendments clarifying federal rules regarding “related” enforcement action and securities industry whistleblower activity. The updated amendments make it clear that a whistleblower can qualify for two separate awards for the same disclosures if their information prompts two separate investigations and, eventually, multiple enforcement actions. The SEC notes that the whistleblower in this case worked directly with the SEC and the DOJ—providing extensive assistance to both investigations. 

SEC Whistleblower Awards: 10 to 30 Percent of Successful Enforcement Action 

The value of a securities industry whistleblower award is determined based on the extent of the enforcement action. When enforcement is taken to halt securities fraud—either by the SEC or DOJ—a whistleblower may be entitled to compensation if they provided information that was voluntary, timely, credible, and crucial to stopping the securities fraud.

SEC whistleblower awards are valued at 10 to 30 percent of the ultimate monetary sanctions imposed. The SEC has discretion within that range. The more instrumental a whistleblower’s information is deemed to be, the more likely the SEC will approve a whistleblower award on the high end of the range (30 percent of the total enforcement action).

Call Our Florida Securities Industry Whistleblower Attorney for Immediate Help

At ​Carlson & Associates, P.A., our Florida securities industry whistleblower attorneys have the professionalism that you can rely on. If you are considering making a disclosure to the Department of Justice (DOJ) or Securities and Exchange Commission (SEC), we are here to help. Get in touch with us today for a strictly confidential evaluation of your SEC whistleblower case. Our securities law firm provides securities industry whistleblower representation in Miami and all over Florida.

Resource:

sec.gov/news/press-release/2021-220