SEC Grants $18 Million to Whistleblower Award
On August 26th, 2023, the Securities and Exchange Commission (SEC) announced that a whistleblower has been awarded approximately $18 million. The whistleblower—whose identity will not be released to the public—voluntarily came forward and provided the federal agency with information that aided in enforcement action that put a stop to securities fraud. Here, our Florida SEC whistleblower attorney provides an overview of the award and highlights key lessons for potential securities industry whistleblowers.
Whistleblower’s Information and Assistance Led to Successful Enforcement Action
The SEC confirmed that a whistleblower’s report to the agency initiated an investigation into alleged misconduct. Beyond that, the whistleblower subsequently provided vital data—thereby saving the SEC significant time and resources in the case. Based on the scope of the recovery for affected investors and the assessment of the importance of the whistleblower’s contributions, the individual was awarded approximately $18 million in financial compensation.
A Second Claimant Was Denied an SEC Whistleblower Award
A key thing to note about this case was that two separate claimant’s sought whistleblower awards in connection with the enforcement action taken by the SEC. While the first claimant was granted an award of approximately $18 million, the second claimant was denied any whistleblower relief.
Indeed, the SEC denied the claim from the second individual on the grounds that the information provided was not considered relevant in allowing the agency to take enforcement action. The SEC states that the second claimant’s data was submitted post-filing and settlement. As such, they were not determined to be eligible to receive any whistleblower award.
An Overview of Eligibility for SEC Whistleblower Awards
To qualify for a whistleblower award under federal law, a whistleblower must meet a number of different requirements. If they fail to meet any requirement, the SEC can deny their whistleblower claim. Here are five core requirements of an SEC whistleblower claim:
- Original Information: The whistleblower must provide original, timely, and credible information. The information hasn’t been previously reported to the SEC and comes directly from the whistleblower’s independent knowledge or analysis.
- Voluntary Submission: The information must be provided voluntarily and not as a result of a subpoena or an official request from the SEC or other regulatory agencies.
- Successful Enforcement: The provided information must lead to a successful enforcement action on the part of the SEC.
- Monetary Sanctions: For a whistleblower to be eligible for an award, the monetary sanctions from the enforcement action must exceed $1 million.
- Adherence to Deadlines: Whistleblowers need to submit their claim for an award within specified deadlines, like within ninety days of the Notice of Covered Action, as required under specific SEC rules.
Set Up a Completely Confidential Case Review With an SEC Whistleblower Lawyer
At Carlson & Associates, P.A., our SEC whistleblower attorneys help people make protected disclosures. We have the skills and expertise to help eligible whistleblowers obtain the maximum possible financial award. Contact us today to set up your fully confidential initial appointment with a lawyer. From our office in Miami, we are well-positioned to represent whistleblowers throughout the area.
Source:
sec.gov/news/press-release/2023-161
