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SEC Issues Nearly $5 Million Whistleblower Award After Money Successfully Recovered For Harmed Investors

On December 7th, 2021, the Securities and Exchange Commission (SEC) announced a whistleblower award totaling nearly $5 million. The award was approved for an individual who helped the agency take successful enforcement action against securities fraud, recovering compensation on behalf of harmed investors. The SEC has now awarded approximately $1.2 billion in compensation to 236 whistleblowers. In this article, our Miami investment fraud attorneys discuss the latest whistleblower award from the federal agency. 

SEC Considers Case Specific Factors When Awarding Whistleblower Compensation 

Whistleblowers play a crucial role in uncovering and stopping securities fraud. In many cases, enforcement action is only taken after an insider provides material information to the SEC or another regulatory agency. When all criteria are met, the SEC can issue a whistleblower award worth between 10 percent and 30 percent of the value of the enforcement action. The specific whistleblower award will be issued on a case-by-case basis. Here are the four key factors that the SEC considered when awarding $4.9 million in compensation to this whistleblower:

  1. Quick Reporting: The SEC notes that this whistleblower made a proactive report of suspected misconduct. Credit was given to the whistleblower for acting quickly to help the agency investigate securities fraud. The sooner potential securities fraud is disclosed, the better position the SEC will be in to protect the rights of investors.
  2. Important Information: The SEC also gave credit to the whistleblower because the information provided was especially useful in helping the agency build its case. With the help of the whistleblower, the SEC developed its comprehensive theory of the case.
  3. Additional Assistance: The whistleblower was also given additional credit because of their willingness to provide additional, ongoing assistance to investigators. The whistleblower agreed to participate in two follow-up interviews and provided additional financial documents as requested by investigators.
  4. Successful Enforcement Action: Ultimately, the SEC was able to take successful enforcement action based on the contributions from the whistleblower. This matters. As noted previously, SEC whistleblower awards are based, in large part, on the total value of the enforcement action. 

The SEC whistleblower program has strong confidentiality protections. Through an SEC whistleblower lawyer, you can make an anonymous disclosure to the federal government. Your identity will only be revealed to the SEC if a whistleblower award has been approved. Further, the SEC will not publish many specific details about your case. Your identity will not be made public. 

Schedule a Confidential Case Evaluation With an SEC Whistleblower Lawyer in South Florida

At ​Carlson & Associates, P.A., our Florida SEC whistleblower attorneys are committed to protecting the legal rights and financial interests of industry insiders who are making disclosures to stop securities fraud. If you have any questions about SEC whistleblower rights or SEC whistleblower awards, we are more than happy to help you navigate the claims process. Call our Miami law office today to arrange a completely private case review with a skilled securities law attorney.

Resource:

sec.gov/news/press-release/2021-253

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