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SEC Issues Largest Whistleblower Award in History—$114 Million in Total Compensation

On October 22nd, 2020, the Securities and Exchange Commission (SEC) released an official press statement confirming that the federal agency recently issued the largest whistleblower award in its history. The record-setting $114 million whistleblower award is made up of $52 million from the SEC and $62 million in a related action from another, unidentified agency. In this blog, our Miami investment attorney offers an overview of the single largest financial award in the history of the program.

SEC: Whistleblower Repeatedly Reported Concerns Internally 

According to information provided by the SEC, the whistleblower provided critically important information that helped spur successful enforcement action. Regulators state that the whistleblower tried to address concerns internally—through the appropriate channels within their organization. Indeed, the SEC emphasized that the whistleblower made consistent attempts to stop wrongdoing. In accordance with federal law, few specifics about the matter are being released to the public. The SEC takes great strides to protect whistleblowers.

Whistleblower Endured Substantial Personal and Professional Misconduct

In its order approving a whistleblower award, the federal agency noted that whistleblower endured significant “personal and professional hardships” as a direct consequence of challenging the misconduct internally. Unfortunately, retaliation is a serious problem for whistleblowers—both in the securities industry and in other industries.

Although retaliation is illegal, federal regulators recognize that it persists. To help account for this issue, the SEC allows whistleblowers to make anonymous disclosures. In fact, under the whistleblower provisions in the Dodd-Frank Act, a whistleblower does not have to disclose their identity to the federal government until an award has been issued.

Three Other Whistleblowers Made Claims and Were Denied  

Notably, the anonymous individual who received the record-breaking $114 million award was not the only person who tried to make a claim in this case. Three other people also applied for whistleblower compensation in relation to the same enforcement action. However, after a comprehensive evaluation, the SEC denied all three of those claims. The agency determined that none of the other claimants provided unique information that led to successful enforcement action.

Whistleblower compensation is only awarded when certain criteria are met. Among other things, this case once again stresses the importance of making proactive, timely disclosures to officials. The sooner a securities industry professional or insider discloses information to the SEC, the more likely that they will be eligible to obtain a whistleblower award through the program established by the Dodd-Frank Act. A lawyer can help you understand your rights if you have questions.

Schedule a Confidential Consultation With an SEC Whistleblower Lawyer

At ​Carlson & Associates, P.A., our Florida securities law whistleblower attorneys represent clients with honesty, clarity, and the highest level of professionalism. We will protect your rights. If you are considering disclosing inside information to federal regulators, we are here to offer guidance and support. Call us now for a confidential, no obligation review of your legal claim. From our Miami legal office, we represent SEC whistleblowers in Florida and beyond.

Resource:

sec.gov/news/press-release/2020-266

https://www.carlson-law.net/former-west-palm-beach-broker-suspended-for-taking-undisclosed-loan-from-customer/

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