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SEC Awards More Than $1 Million To Whistleblower Who Helped Stop Securities Fraud

On June 24th, 2021, the Securities and Exchange Commission (SEC) announced a whistleblower award in excess of $1 million. It is the 179th award that has been granted in the history of the SEC’s whistleblower program. The agency has now given out more than $930 million in financial compensation to securities industry insiders and other individuals who have come forward to provide information to help stop fraud. In this blog post, our Miami investment fraud attorneys discuss the latest whistleblower award from the SEC.

SEC Whistleblower Compensation: Multiple Successful Enforcement Actions 

In its order determining whistleblower compensation, the SEC has approved more than $1 million for an individual who voluntarily came forward with information that helped lead to successful enforcement action in multiple securities fraud cases. In issuing the award, the SEC highlighted four key factors:

  1. The tip provided by the anonymous individual resulted in an investigation being opened by the SEC;
  2. The anonymous individual provided ongoing assistance to SEC staff members who were reviewing the matter;
  3. There was significant interest from law enforcement in addressing the underlying fraud in this case; and
  4. The SEC whistleblower suffered significant personal hardship for cooperating with the agency.

Notably, specific details about the securities fraud scheme are not being disclosed by the SEC. The agency provides limited information to the public in whistleblower cases. The name of the whistleblower is never released to the public. This is important as it helps to protect the whistleblowers from facing retribution in their industry.

The SEC has Discretion in Awarding Whistleblower Compensation 

In accordance with federal law, SEC whistleblower compensation is paid out of a pre-set government fund. It does not come out of the pockets of individual or institutional investors. A whistleblower may be entitled to financial compensation valued between 10 percent and 30 percent of the value of the underlying enforcement action.

An as example, if a whistleblower helps stop securities fraud and enforcement action recovers $10 million for investors, then the whistleblower may be entitled to between $1 million (10 percent) and $3 million (30 percent) in financial compensation through the SEC whistleblower program. There is no cap on the award. In some cases, SEC whistleblower awards have reached eight and even nine figures.

The agency retains considerable discretion in determining the value of the whistleblower award. The greater the importance of the information provided by the whistleblower and the more effort they put into helping the SEC, the more likely they are to be granted the maximum allowable whistleblower award.  

Schedule a Confidential Consultation With an SEC Whistleblower Lawyer in Miami, FL

At ​Carlson & Associates, P.A., our Florida securities fraud lawyers have the professional skills and legal expertise to represent individuals in SEC whistleblower claims. If you are considering making a protected disclosure to federal securities regulators, we are prepared to protect your rights and help you seek the financial compensation you deserve. Call our law firm now for a confidential review of your case.

Resource:

sec.gov/news/press-release/2021-110

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