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SEC Awards Nearly $4 Million in Compensation to Whistleblower to Securities Industry Insider

On July 14th, 2020, the Securities and Exchange Commission (SEC) confirmed that the agency has awarded $3.8 million to a whistleblower who helped by providing critically important information to federal regulators.

The SEC notes that the whistleblower’s disclosures both disrupted an ongoing fraud scheme and helped bring enforcement action that recovered millions of dollars for investors. Below, our Miami investment fraud lawyers provide a more detailed overview of the SEC order.

SEC Whistleblower Award: $3.8 million to Anonymous Individual  

The SEC’s Claims Review Staff issued a preliminary decision in favor of the whistleblower. In approving whistleblower compensation, the agency determined that the individual’s disclosures were both timely and material. As such, the whistleblower was permitted to receive financial support.

It is the 87th award in the history of the whistleblower program. The SEC has now granted more than $500 million in total compensation to securities industry whistleblowers. In relation to these cases, the agency has imposed $2.5 billion in remedies, including restitution for investors, disgorgement of ill-gotten gains, and fines.

Limitation on Compensation: Information Narrow in Scope

In determining the value of a whistleblower award, the agency will always consider the specific facts of the case. Under federal law, the SEC has discretion to award whistleblower compensation valued between 10 percent and 30 percent of the financial recovery for investors. In this case, officials decided to keep the award on the low end of the spectrum.

In this case, the agency noted that the whistleblower came forward to provide genuinely new information. Further, the SEC determined that the information helped the agency put a stop to an ongoing fraud scheme and, eventually, return multiple millions of dollars to investors. That being said, officials also determined that the whistleblower’s disclosures were relatively limited in scope. As such, the whistleblower was not able to render much additional assistance after making the initial disclosures.

Three Tips for Securities Industry Whistleblowers  

Through the SEC whistleblower program, securities industry insiders who have important information have the authority to make disclosures to federal regulators while also protecting their own identity and putting themselves in the best position to obtain compensation. Here are three tips for making a disclosure to the SEC: 

  1. Be Proactive: The SEC credits whistleblowers who make timely disclosures.
  2. Details Matter: Whistleblowers who provide comprehensive information and assistance to the SEC may be in line to receive a higher level of compensation.
  3. Protect Your Privacy: By working through a Miami SEC whistleblower lawyer, you can keep your confidentiality throughout most of the process.

Schedule a Confidential Consultation With an SEC Whistleblower Attorney

At ​Carlson & Associates, P.A., our Florida SEC whistleblower team is standing by, ready to protect your rights and interests. We can help you share confidential information with federal regulators. To set up a completely private initial consultation, please give us a call today. With an office in the heart of Miami, we represent security industry whistleblowers throughout Florida.

Resource:

sec.gov/news/press-release/2020-155

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